A few days ago, I announced the Government’s 2014-15 Land Sale Programme which comprises 34 residential sites, capable of providing about 15 500 flats in total. Regarding other sources of land supply, it is estimated that the West Rail property development project at Yuen Long Station will contribute 1 880 flats, and the MTR Corporation Limited’s (MTRCL) own projects at Tseung Kwan O and Tai Wai Station could provide a total of some 4 650 flats. Moreover, the Urban Renewal Authority (URA) projects could provide about 3 200 flats, and 4 700 flats are estimated to be supplied by private development or redevelopment projects based on the average figures of the past 10 years. Combining the various sources mentioned above, the total private housing land supply in the next year is estimated to have a capacity to produce about 30 000 flats.
Amongst the 34 private residential sites, four are on Hong Kong Island, seven in Kowloon and 23 in the New Territories. Classified by site area, 16 sites have an area of 0.5 hectare or below, 15 sites have an area larger than 1 hectare, and three sites have an area in between. Grouped according to flat production capacity, 14 sites are estimated to provide more than 500 flats each, 13 sites could each provide 100 to 500 flats, and the remaining seven sites are relatively smaller, estimated to provide less than 100 flats each.
I would like to share my views to respond to some of the concerns raised over the past few days on the private housing land supply in the next financial year.
(1) As 21 sites out of the above-mentioned 34 sites require rezoning, there are doubts about the quantity of land supply which can be provided through government land sale.
Similar concerns were also raised after the announcement of the 2013-14 Land Sale Programme last year. At that time, amongst the 46 residential sites capable of providing about 13 600 flats, 22 had to undergo rezoning or other procedures before being put up for sale. During the year, we made adjustments to the Land Sale Programme twice, with three sites reallocated for public housing development and eight additional sites added. In the end, a total of 36 residential sites capable of providing about 13 700 flats were sold or will be put up for sale before the end of March, which has reached the Government’s original target of selling private residential sites in the whole year. This flat production capacity is about 60 per cent more than the previous year’s land sale result and is the highest since 2000-01.
As usual, while we are working hard in the coming year to take forward rezoning and other procedures for various sites in the Land Sale Programme, relevant departments will continue to work in collaboration on identifying suitable sites and going through different procedures for other sites. Our target is to maintain steady housing land supply and cope with possible difficulties. The Land Sale Programme is not cast in stone.
We understand that rezoning work is never easy. It is full of difficulties, but we hope that the community and locals, having regard to the overall interests of the community, understand and support our work to meet the community’s pressing need for housing land. The prices of residential property have remained stable under the “double stamp duty” measures. However, we have to continue to provide steady land supply for the market by a multi-pronged approach to enable the healthy development of the property market.
(2) When announcing the 2013-14 Land Sale Programme, various sources of land supply are estimated to have a capacity to provide about 25 800 flats in total. However, it is now estimated that only about 18 000 flats can be provided. Some critics have said that there is a difference of 30 per cent.
As I explained in “My Blog” last year, since 2011-12, the Government’s housing land supply target is to maintain on average the provision of land for building some 20 000 private residential flats each year. Regarding the number of 25 800 flats estimated to be produced by government land sale and other sources of land supply mentioned at the announcement of the 2013-14 Land Sale Programme, it is an estimation of land supply from various sources, namely government land sale, railway and urban renewal projects, and the average number of sites for private development or redevelopment. This is not the private housing land supply target of that year. The compilation basis of this figure is the same as that in the past (the figures were 30 000 flats in 2012-13 and 35 000 flats in 2011-12). The purpose of providing this figure is to give comprehensive information to the market as far as possible and enable the community to have more understanding of land supply.
In fact, railway property development projects and urban renewal projects are implemented according to the plans and progress of the MTRCL and the URA respectively. The supply from private development and redevelopment (i.e. private projects subject to or not subject to lease modification/land exchange) is market-oriented and not controlled by the Government. In the past, we set the target of provision of land for some 20 000 private residential flats each year on average. Starting from this year, as a result of the new housing target of the next 10 years and the proportion of private residential flats, our target has been adjusted to 18 800 flats annually. In other words, taking into account the situation of different sources of land supply, the Government will adjust the quantity of land sale every quarter. Our policy objective is to ensure a healthy development of the property market.
In addition, the 18 000 flats of 2013-14 mentioned above have not yet included the 1 700 flats from the Kwun Tong Town Centre Project, for which the URA invited developers to submit Expressions of Interest (EOIs) for joint venture development in February. Tenders will be invited for the project after the closing of the invitation for EOIs in early April.
(3) As the Land Sale Programme includes a number of sites with low development density, some query whether the Government is inclined to build “luxury houses” for the rich.
The planning parameters of each site are set according to the development intensity of the district, the infrastructural capacity of the site (such as transport and sewerage), assessment of air ventilation and the surrounding area (such as the development density of other sites nearby, the environment and the ridgelines, etc.). In the 2014-15 Land Sale Programme, many sites are located in the New Territories, while some are located within Green Belt zones or areas not supported by the railway. For example, the sites near Siu Lam in Tuen Mun East and Cheung Sha on Lantau Island will have a relatively low development density. On the contrary, sites in urban areas, such as the one on Yeung Uk Road, Tsuen Wan, will have a relatively high development density as they are located in urban areas and near transport infrastructure. In other words, it is not possible to develop all the sites with high density.
The Government has already set a clear housing target and a public to private housing ratio. The Development Bureau will allocate suitable sites for developing subsidised housing, and at the same time provide the market with suitable sites for private residential housing development according to this ratio. Generally speaking, subsidised housing requires sites of a larger scale which are easily accessible. In this regard, many large sites suitable for high-density development are reserved for subsidised housing development. Inevitably, some of the sites reserved for private residential developments will have lower density or smaller area. Furthermore, the community has different demands for private housing. We need to take this into account and strike a balance in our land supply. In fact, for the 36 sites which have been sold or will be put up for sale in 2013-14, a total of at least 10 230 flats can be provided on the sites which are imposed with minimum flat number restrictions, accounting for 75 per cent of the flat production capacity of this source of supply. When compared with the preceding two years, i.e. 2012-13 and 2011-12, the ratio of units supplied from sites with minimum flat number restrictions is similar.
(4) Over the past 10 years, the number of hotel rooms has doubled and some residential sites in the urban areas have been converted for hotel development. Some criticised the Government for not optimising the residential sites.
Firstly, the number of hotel rooms has increased by 30 000 from 39 000 rooms 10 years ago to 69 000 rooms currently. Over the same period, the number of residential flats has increased by 280 000 from 2 330 000 to 2 610 000 units. Moreover, the sizes of hotel rooms are usually much smaller than those of residential flats, so they are not directly comparable. We should not over-generalise when doing an analysis. Housing supply is a policy priority of the current term of the Government. When developers apply for converting their residential sites for hotel or other uses, the Government will provide views to the Town Planning Board according to relevant policy.
Moreover, in view of the economic and social needs of Hong Kong, such as those for housing, commercial, retail, tourism, school, hospital and community facilities, the Government has a responsibility, while increasing housing land supply, for catering to the needs in different aspects and should not neglect any of them. Tourism is one of the key industries in Hong Kong's economic development. In addition to making economic contributions, it provides a lot of employment opportunities, many of which can be taken up by people with low skills or low academic attainment. We need to strike a balance when planning the use of our land.
2 March, 2014
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