(A) The 14-year Application List system abolished from 2013-14
In the past voices within society constantly urged the Government to abolish the Application List system. I have explained that since 2010 the Government has fine-tuned the land sale arrangement by initiating the sale of government sites on a quarterly basis to ensure a stable land supply to the market while retaining the Application List system. In practice, the Government has regained full control of land supply. In fact, in 2011-12, 26 sites were initiated for sale by the Government while only one site was triggered by a developer. In 2012-13, 22 sites were initiated for sale by the Government while only two sites were triggered by developers. The three sites triggered by developers are small in size and can produce no more than 200 units in total.
In order to address public concerns and misunderstandings, including those of quite a number of Legislative Council Members, scholars and other parties, the Government has decided to abolish the Application List system.
(B) All sites in the Land Sale Programme put up for sale
The Government plans to place all 46 private residential sites in the 2013-14 Land Sale Programme on the market.
As stated in the 2010-11 Policy Address, the average annual take-up rate of first-hand private residential flats was 18 500 units during the past ten years and, on average over the next ten years, land needs to be made available annually for some 20 000 private residential flats. To meet this target the Development Bureau (DEVB) will make land available by selling Government land at sources including railway property development projects, redevelopment projects of the Urban Renewal Authority, projects subject to lease modification and private redevelopment projects not subject to lease modification. In the past two years, sites sold by the Government have provided some 7 900 and 8 200 residential flats respectively. This number together with the other sources of land supply stated above could achieve the target of providing about 20 000 residential flats annually. However, there are still a number of misunderstandings in society, including:
(1) The sites in last year's Government's Land Sale Programme can provide 13 500 units, but the sites sold can only provide 8 200 units, showing that the Government failed to meet the target;
(2) The Government will not sell sites not triggered by developers;
(3) The sites rolled over in the Land Sale Programme are left idle, and the Government should allocate these sites for public housing;
(4) According to the Budget, 30 000 units would be provided by private land last year, but in fact there are only 25 800 units this year. Therefore, the land supply for this year has shrunk.
To address the community's misunderstandings and respond more quickly to the market demand for land, we plan to put up for sale all 46 residential sites in the 2013-14 Land Sale Programme, which is expected to provide 13 600 units. This is a big increase compared to the last two years, i.e. 8 200 units produced in 2012-13 and 7 900 units in 2011-12. In other words, it is estimated that a total of 25 800 units can be made available from different sources of land supply this year, far exceeding the target of 20 000 units annually. The number mentioned in the this year's Budget is the actual production rather than the supply capacity.
Furthermore, I would like to add a few more points:
(1) Among the 46 private residential sites in the 2013-14 Land Sale Programme, 21 sites have an area of less than or equal to 0.5 hectares (ha), and 10 sites have an area between 0.5 and 1ha. In other words, the number of small and medium-sized sites accounts for more than 67 per cent of all sites. These smaller residential sites will make it easier for small and medium-sized developers to enter the market and can encourage competition.
(2) Of the above 46 sites, 22 are still under the rezoning process, which is yet to be completed. However, we will endeavour to consult and lobby the local community, and will work together with various government departments to give priority to the task in a bid to complete the procedures and put the sites on the market as soon as possible. What we are doing now is no different from what we have done in the past and our purpose is to increase transparency and enable market participants to make early assessments and preparation. In fact, this is a well-established practice. Take for example two pieces of newly created land at the former Lingnan School on Stubbs Road and at Kwun Fat Street in Siu Lam, Tuen Mun. This also applies to unexpired short-term tenancy sites or sites which are under construction when they are included in the Land Sale Programme. Imagine this: If we have to wait for all procedures to be completed in sequence before including sites in the Land Sale Programme rather than working in tandem as far as is reasonable in order to shorten the time needed for completing the procedures, in the end it will slow down supply and the community will suffer.
(3) Regarding new sites to be identified in the coming year, if they are not allocated for public housing they will be put onto the market as soon as possible.
(4) During the six years from 2004-15 to 2009-10 the Government did not initiate the sale of sites for private residential developments. During that period, only 30 sites were triggered by developers, producing about 17 600 residential flats and leading to a plunge in flat completions in the past few years. Recently, property prices have reached a level that is unaffordable for the general public. Consequently the Government will continue to monitor the market. If bids are not received for land sale by tender in the coming year the Government will study the situation and will continue to supply land in response to market needs.
Both the Policy Address and the Budget have revealed that the number of completed residential flats in the coming few years will increase considerably compared to the past few years. The Financial Secretary also announced measures to further curtail demand at the end of last month. In the coming year, we will enhance our efforts to increase land supply and continue to expedite the processing of pre-sale consent applications by developers so that residential flats will be made available to the market earlier. The purpose of these various measures is to meet the demand for housing in the community.
3 March, 2013
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