Key points
- Paul Chan, the government’s financial secretary, reiterates the government’s commitment to the land policy after the first commercial plot sold this year sold for 35% less than the low end of the appraisal.
- This fiscal year, the government plans to put 18 more plots on the market, contributing to the anticipated HK$85 billion in land premium income.
According to Hong Kong’s finance chief, authorities will stick to the government’s objective of delivering a sustainable and consistent supply of housing and will not lower land prices while also attempting to avoid skyrocketing valuations.
The promises were given on Saturday by Finance Secretary Paul Chan Mo-po as he dismissed the outcome of the government’s first land sale of the year, in which a prominent commercial property in Mong Kok was purchased for HK$4.73 billion (US$602.5 million), or 35% less than the low end of its estimate.
“We can say that the government does not have a high land price policy, which had drawn criticism in the past. But we won’t sell land at dirt cheap prices either,” he said in a televised interview.
“For every tender, the Lands Department assigns a professional group of surveyors to make an independent evaluation of the site and set an undisclosed reserve price for the tender … So we have a very stringent tendering system for land sales.”
Sun Hung Kai Properties earned a tender for the 11,537 square meters (124,183 square foot) site north of Argyle Street and east of Sai Yee Street by outbidding two other bids.
In less than a month, the government had pulled three other plots from sale due to a lack of interest and excessive interest rates, prompting the auction.
Market experts were left to speculate about the implications of the lower-than-expected sale for upcoming government land sales.
Chan emphasized that the Mong Kok site was not just a commercial undertaking because the developer was also obligated to construct auxiliary amenities including a transportation hub, a youth center, and an assisted living facility.
He emphasized that despite tender prices occasionally being impacted by market fluctuations, the government’s objective of maintaining a consistent supply of land and housing for commercial and residential developments remained constant.
“We won’t change our land sale plans because of a short-term market fluctuation. We will make careful assessments, but we are determined to provide a sustainable and stable supply of land and housing for society,” he said.
The government is expected to sell 18 extra plots this fiscal year—12 residential, three commercial, and three industrial—contributing to a projected HK$85 billion in land premium income, according to the finance chief.
Chan Kin-por, a member of the Executive Council, a major decision-making body, commented on another sensitive land issue. He backed the government’s plan to build three artificial islands at Kau Yi Chau for an estimated HK$580 billion “Lantau Tomorrow Vision” project.
The ambitious project, which is currently up for public statement until the end of March, seeks to reclaim 1,000 hectares (2,471 acres) of land in its initial phase and construct 210,000 apartments over the next 20 years off the coast of Hong Kong’s Lantau Island to serve as a third business district.
According to Chan Kin-por, the reclamation was required and the quickest approach for the government to create its own land bank for the future growth of the city.
“The project will reclaim 1,000 hectares of land, so this is very important for the government to build its own land reserve, without which we cannot do anything to push for Hong Kong’s development,” he told a radio program.
“Land reclamation is the fastest way to create land supply as other methods such as the resumption of brownfield sites or farmland will take a long time and involve complex matters such as relocation, compensation, and even lawsuits.”
Agricultural land in the New Territories that is currently used as a warehouse for industrial storage, logistical, or parking purposes is referred to as a brownfield site.
Chan allayed worries about the project’s financial sustainability by stating that it would take 20 years to complete and cost HK$30 billion annually. He advised the government to finance the project through a public-private partnership arrangement.
- Published By Team Hongkong Journalist
