Following is the translation of the opening remarks by the Secretary for Development, Mrs Carrie Lam, at the press conference today (February 29) on the 2008-09 Application List:
In his Budget Speech delivered two days ago, the Financial Secretary has made several important remarks about land supply. I am happy to announce today the arrangement for the sale of Government land, also known as the Application List, from now until March 2009, and to elaborate on the Financial Secretary's remarks. With me today are the Director of Lands and the Director of Planning. Indeed, the presence of my two Directors signifies that the 2008-09 Application List is the result of very close collaboration between the planning and lands departments under Development Bureau.
The 2008-09 Application List has two distinguished features – the inclusion of land specifically for hotel development and the adoption of measures to address the community's concerns about excessive building bulk. I will come to these two points later. Let me first share with you the factors we have taken into account in compiling the 2008-09 Application List.
As stated by the Administration on many occasions in the past, and reiterated by the Financial Secretary, land sale should be driven by market demand, and not led by the Government. The Government's role is to make available land to meet different development needs and then let the market determine flexibly the quantity and timing of land to be put up for sale. The Application List system is such a market driven mechanism and has been working well. This system has resumed operation since January 2004 and a total of 26 sites have been sold by way of auction under the system. We consider that supply of government land for private residential and commercial purposes should continue to be provided through the Application List. The system ensures the stability and sustainability of land supply.
In formulating the land sale arrangement for 2008-09, we are guided by three key principles:
| (a) | the need for a clear and predictable Government policy on land supply for private development, to provide certainty, clarity and consistency to the trade and to the public; |
| (b) | the need to provide an adequate number of sites to meet the housing and business needs contributing to Hong Kong's progressive development; and |
| (c) | the need to promote quality living environment for the people of Hong Kong. |
The 2008-09 Application List comprises 62 sites, covering a total area of nearly 60 hectares. Of these, 36 are sites rolled over from the 2007-08 Application List and 26 are new sites. This is the largest number of sites we have put into the AL since 2004-05. The List comprises 42 residential sites, 10 commercial / business sites and 10 "hotel only" sites. Depending on the design of the actual developments, we estimate that some 13,000 to 13,500 flats could be produced on the residential sites, a total GFA of over 490,000 square metres on the commercial/business sites, and some 9,000 to 11,000 hotel rooms on the "hotel only" sites.
Apart from increasing the total number of sites from 47 in 2007-08 to 62 in 2008-09, the new AL has generally met the various requests put to us –
| (a) | in response to a thriving housing market, the List contains a total of 42 residential sites suitable for development to meet housing demand from different income groups – for example, high-end low density housing developments in mid-levels, Repulse Bay, South Bay and Kowloon Tong, and sites in locations more suitable for mass housing developments like Tseung Kwan O and Tung Chung; |
| (b) | a good mix of sites of different sizes, including sites of smaller size to attract the interest of small and medium size developers. In the 2008-09 AL, 22 residential sites are less than 0.5 hectare each; |
| (c) | to sustain supply of quality office space, although no commercial/business sites have been triggered for sale over the past two years, inclusion of two good location commercial sites in Central and one in Hung Hom into the 2008-09 AL; and |
| (d) | inclusion in the AL for the first time sites to be sold for hotel use only to facilitate hotel developments to maintain Hong Kong's competitiveness in tourism and exhibition and convention services. |
Pursuant to the advice of a task force led by the Financial Secretary on promoting Hong Kong as a convention, exhibition and tourism capital, we have gauged the need for land supply for hotel development. We have received clear feedback that the current system of selling land for commercial use including office, retail and hotel could be a disincentive to hotel development. This is because under our established land valuation system, the land value is assessed on the basis of the maximum development potential of the site. This means that in locations where office use would attract a higher value than hotel use, the commercial site would be valued on the basis of office. Under such circumstances, it would be commercially unattractive for developers to buy a commercial site but develop it into hotel.
Inclusion of "hotel only" sites means that the sales conditions for these sites will stipulate that they could only be used for hotel development. Accordingly, the assessment of the reserve prices for these sites to be triggered for auction or to be sold subsequently will be based on the open market value of "hotel use" only. We have included a total of 10 "hotel only" sites in the 2008-09 AL in different locations which should be suitable for development into a variety of hotels. For consistency, in the coming year, we will accept lease modifications or land exchanges for "hotel only" development and land premium chargeable for lease modifications or land exchanges would likewise be assessed on the basis of the use for hotel purposes only. We trust that these new arrangements will help to increase the supply of hotels to meet demand and enable us to compare well with neighbouring cities in terms of hotel accommodation. These arrangements are introduced on a pilot basis for the duration of the 2008-09 AL. We will review the impact in light of market response before deciding whether we should continue with "hotel only" sites in the 2009-10 AL.
Last year, we sold nine residential sites from the 2007-08 AL. We are also seeing a robust market with increase in property prices which might have led to concerns about anticipated shortage of flats in the coming years.
We have included more residential sites in the new List. I should however point out that the AL is not the only source of land supply for housing developments. Developers may purchase land from the private market, acquire existing properties for consolidated redevelopment, convert the sites they have in hand to residential/commercial uses by way of lease modifications, and take part in the development projects of MTR Corporation Limited and the Urban Renewal Authority.
In the next few years, there is a healthy supply in the primary private housing market, with an estimated supply of about 65,000 units. These include 10,000 unsold units of completed projects, some 45,000 units which are under construction but not yet sold or offered for sale, and 10,000 units from the disposed land of which construction has yet to start. Looking ahead, as the planning and lands authority as well as the co-ordinator of infrastructure, Development Bureau will closely monitor the demand and supply of land and make available land for residential uses.
The Chief Executive, in his 2007 Policy Address, has stated that we would review the relevant Outline Zoning Plans to lower development density where justified for a better living environment. We are implementing this policy objective in our land sale programme. To this end, we have examined each site in the 2008-09 Application List carefully and lower the development density as appropriate. In the conditions of sale for each site to be sold, we will specify development parameters like building height limits and maximum gross floor area or plot ratio (or equivalent). We have also conducted or are conducting Air Ventilation Assessment (AVA) for sites where required in accordance with our guidelines under the 2006 Joint Technical Circular and will stipulate any appropriate development parameters/restrictions arisen from such studies in the Conditions of Sale. For some of the sites, where applicable, we will include site coverage limits or non-building areas in the Conditions of Sale.
Ends/Friday, February 29, 2008
Issued at HKT 20:10
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