Housing plan ‘can meet demand for next 5 years’, experts say

Real estate experts have voiced optimism that the Hong Kong government’s plan to vastly increase land supply on all fronts to meet the city’s housing, economic and social needs will be able to cope with demand for residential units over the next five years. But there’ll be no let-up in soaring land prices as competition among developers remains stiff.

In his maiden budget address on Wednesday, Financial Secretary Paul Chan Mo-po said 28 residential sites will go under the hammer under the 2017-18 land sale program which, together with railway property and redevelopment projects, will potentially provide a total of 31,620 private apartments.

The 28 sites will include 20 new ones, about half of which will be located in the Kai Tak new development area – the 320-hectare site of the city’s former airport in East Kowloon which has been the focus of recent fierce bidding between local and mainland developers, with record prices paid for some of the plots.

In the first quarter of the coming financial year (April to June), about 8,000 residential units are expected to come on stream.

Secretary for Development Eric Ma Siu-cheung, who has been in his new post for less than two weeks, pledged that the government will adopt a multi-pronged approach to raising residential land supply in a consistent and flexible manner that can respond to social needs.

As for public housing supply, there will be 71,800 public rental units and about 22,600 subsidized sale units available in the market from 2016 to 2021.

“We agree that the government’s plan for future residential housing supply is reasonable, and will be able to meet the market’s demand for residential properties,” said Clement Lau, chair of the Roy- al Institution of Chartered Surveyors.

The Hong Kong government had pledged a host of measures to deal with the city’s chronic housing problem and to curb sky-high property prices since Chief Executive Leung Chunying took office in 2012.

In December last year, the price index of private domestic units tracked by the Rating and Valuation Department soared to 306.8, surpassing the peak level of 306.1 record- ed in September 2015.

For the whole year of 2016, the price index of private domestic units tracked by the department stayed at 286.1 — 3.6 percent lower than the level of 296.8 for 2015.

The government estimated in the 2017-18 Budget that the private sector will produce an average of 20,300 residential units annually over the next five years, representing a rise of about 70 percent over the yearly average for the past five years.

will be auctioned under the 2017-18 land sale program