A woman walks near a housing project. There will be a combined supply of 5,000 residential units in the coming fiscal quarter. Antony Dickson / AFP

Secretary for Development Carrie Lam reiterates government's land policy

The government will maintain its relatively fast pace of increasing land supply as it plans to sell eight residential sites to provide about 5,000 new flats next quarter, according to Secretary for Development Carrie Lam.

Five residential sites - one in Tseung Kwan O district, one in Tuen Mun district and three on Lantau Island - will be put up for sale in the coming October to December quarter, which are likely to produce a total of 1,770 units, Lam told reporters on Friday.

Three West Rail property development projects are also scheduled to be disposed of by the end of the year, generating a total of 3,326 new units, according to Lam.

The combined supply of 5,000 units in the coming quarter compares with 6,000 units in the July to September quarter and 3,000 units in the April to June quarter.

The goal of boosting land sales and ensure the supply of 20,000 apartments annually in Hong Kong will stay unchanged, Lam said, adding that the pace of land sales this year is in line with the government's target.

However, the government said it will halt land auctions during the next three months. All the land sales will be carried out through tender, which is ideal given the current market sentiment as measured by government surveyors, according to Lam.

Wong Leung-sing, associate director of Centaline Property Agency Limited, believes that the series of lackluster land sales recently is the reason why the government favors the tender process.

The government auctioned land at Tseung Kwan O district for HK$3.12 billion last week, missing even the low-end estimates of HK$3.3 billion in a Bloomberg News survey.

Another land auction and one tender both fell below market estimates in August, after global stock markets were roiled by the US debt downgrade.

"The government is taking a prudent approach," said Wong. "The Tseung Kwan O, Tuen Mun and the three MTR sites up for sale are all very large ones. If these public auctions fall short of estimates again, it will critically affect market sentiment."

Home transactions in Hong Kong have slowed to only half the average level for the past two years after home prices surpassed the previous high of 1997. A Centaline report released on September 2 showed that only 5,439 private residential transactions were recorded in Hong Kong in August in comparison with an average of some 10,000 home transactions per month during 2010 and 2011.

"In order to stabilize our real estate market and ensure healthy development, continuing to provide adequate land supply is a focus of government policy," Lam said on Friday.

The two residential sites in Tseung Kwan O district and in Tuen Mun district to be sold next quarter will be required to provide a minimum amount of small and medium-sized apartments to meet market demands, according to Lam.

The government will also sell two commercial sites, one in Sha Tin and the other in Hung Hom, during the coming quarter.

litao@chinadailyhk.com

China Daily

(HK Edition 09/17/2011 page2)