Hong Kong development chief says ‘prudent’ approach needed for land sales, citing market sentiment

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Hong Kong development chief says ‘prudent’ approach needed for land sales, citing market sentiment

Hong Kong will have to be prudent when selling land in the coming fiscal year, development minister Bernadette Linn has said, as the government announced eight residential sites, six of which were rolled over from last year’s programme.

Linn announced the land sale programme at a press conference on Thursday, saying the eight residential sites would provide about 5,690 flats.

Bernadette Linn meets the press on February 29, 2024. Photo: GovHK.

Two commercial sites in Kai Tak and Sha Tin would provide about 120,000 square metres of gross floor area, and a site designated for industrial use would provide a floor area of 544,000 square metres.

The eight residential sites would include two new sites in Siu Lek Yuen in Sha Tin, and six unsold ones located in Kai Tak, Sai Kung, Stanley, Cheung Sha, Tung Chung and Tuen Mun rolled over from the current fiscal year’s programme.

See also: Hong Kong suspends residential, commercial land sales amid sluggish market

The first residential site to go up for tender in the first quarter of the 2024-25 fiscal year will be one of the Siu Lek Yuen sites, which is capable of providing some 280 flats, according to the Development Bureau.

The government “will continue to provide land to the market for economic and housing development in a prudent and paced manner, in order to maintain a sustained and steady land supply,” Linn told reporters in Cantonese on Thursday.

high-rise low-rise housing Hong Kong
High- and low-rise housing in Hong Kong. File photo: Kyle Lam/HKFP.

Last year, the government planned to sell 12 residential sites, three commercial plots and three areas designated for industrial use.

But the city saw a record six failed land tenders amid high interest rates and a bleak property market outlook that curbed developers’ appetites for new plots, as home prices fell 23 per cent from the peak in September 2021, according to official figures.

Made with Flourish

Finance minister Paul Chan said on Wednesday that the HK$19.4 billion the government made in land sales revenue was “substantially lower” than the original projection of HK$65.6 billion.

The government recorded an estimated deficit of HK$101.6 billion for the 2023-24 fiscal year.

Prime site excluded

Linn also said a commercial plot at Queensway Plaza would not be included this year, citing weak market sentiment. She called it a prime “treasure” site that the government was not prepared to include in the upcoming land sale programme.

Queensway Plaza. Photo: Wikimedia Commons.
Queensway Plaza. Photo: Wikimedia Commons.

With the eight residential sites, the MTR Corporation and the Urban Renewal Authority (URA) will produce a total of about 15,150 flats in the coming fiscal year, exceeding the government’s annual supply target of 13,200 flats.

The railway operator plans to put a residential development project at Tung Chung East Station up for tender in the coming year, providing about 1,200 flats. The URA, meanwhile, plans to provide 2,680 flats in Kowloon City, Mong Kok, and Kwun Tong, with an additional 5,400 units to be redeveloped by the private sector.

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