To address the overheated residential property market, the Government has recently introduced a new round of demand-side management measures to increase the ad valorem stamp duty rates for residential property transactions to a flat rate of 15 per cent by amending the Stamp Duty Ordinance. The new measure will continue to adopt the exemptions under the existing doubled ad valorem stamp duty regime, mainly applicable to Hong Kong Permanent Residents who are either first-time home buyers or changing flat at the time of transaction. It reaffirms the current-term Government’s policy on according priority to the home ownership needs of Hong Kong people.
Allow me to reiterate the situation of land and private residential property supply here and let the figures speak for themselves, so that the public will know that abundant supply of private residential property, much greater than that over the past decade, is being steadily provided to the market. Details are as follows:
Firstly, as at end of June, the potential supply of first-hand residential property for the coming three to four years was 93 000 flats, of which about 70 per cent were small and medium-sized flats. This figure is 43 per cent higher than that when the current-term Government took office. It is also a record high since the release of such statistics in 2004. In spite of the sales boom in the first-hand and second-hand residential property market in the previous quarter, the figure still stood at 93 000 as at end September. At the same time, the number of flats involved in approved pre-sale consent applications was 14 000 as at end of October, the highest since 2011 when relevant statistics were introduced. It is estimated that about 17 000 first-hand flats are now readily available for sale. Moreover, the number of committed projects eligible for applications for pre-sale consent, including applications not yet submitted and submitted but pending approval, will yield more than 25 000 flats. Hence, the future supply of first-hand flats will be abundant.
Secondly, regarding flat completions, the Rating and Valuation Department estimated early this year that the total number of new completions of private residential flats this year would be 18 000 flats, the highest since 2005. The figure has increased by more than 50 per cent when compared with the average annual completions of 11 700 flats in the past 11 years. As at end of September, 15 100 flats had been completed (should be 10 700 flats completed and 4 400 flats under construction for completion by 2016). Due to an abundant supply of land over the past few years (please see points 3 and 4 below), it is estimated that flat completions will stay at a high level in the coming few years. It is noteworthy that even though most of these flats have already been pre-sold before completion, they will form part of the supply of completed flats for rent or sale, because when home buyers move into these new flats, the flats they are living will be released for rent or sale in the market.
Thirdly, for the number of flats under construction, as at end September 2016, the number of private residential developments granted approval for construction could provide 19 100 flats. It is a record high since 2001 and the highest in the past 15 years. This figure represents a significant increase of over 34 per cent when compared with the average annual construction of about 14 200 flats in the past 15 years.
Fourthly, in the two financial years of 2014-15 and 2015-16, the private housing land supply exceeded our supply target. For 2016-17, the supply target is 18 000 flats. According to the information available, the land supply in the first three quarters is capable of providing about 16 100 residential flats, representing 90 per cent of our full-year target. As such, I can well assure you that this year’s private housing land supply will exceed the supply target again. Based on the current progress, the potential private housing land supply in 2017-18 is estimated to be capable of providing about 28 000 flats. We are confident that the private housing land supply target for 2017-18 can also be met.
Colleagues of the Development Bureau and relevant departments will keep up the efforts to identify land, and put up private housing sites for sale in the market in a steady and sustained manner. It is our hope that the public will recognise our steadfast determination and unwavering endeavour, and rest assured that we will make every effort to resolve the housing problems of Hong Kong.
6 November, 2016
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