Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Thursday, Mar 30, 2023

Hong Kong government tightens land supply amid faltering property market

Hong Kong government tightens land supply amid faltering property market

The Hong Kong government will only sell one plot of residential land in the final three months of the current financial year as it withholds land sales amid falling property prices.

The Hong Kong government will only sell one plot of residential land in the final three months of the current financial year, tightening its land-release programme to balance the number of available homes and demand in the world’s most expensive residential property market.

Only one residential site in Tsuen Wan will be put up for tender in the January to March period, which will provide around 490 flats, Secretary for Development Bernadette Linn Hon-ho said on Friday.

The government will also offer a rare, large commercial site at the junction of Sai Yee Street and Argyle Street in Mong Kok, capable of providing around 141,600 square metres of gross floor area.

The government will not be constrained by the prevailing economic situation or be concerned about land sales unable to fetch high land premium, Linn said. “We want to achieve a certain policy objective, whether we can fetch a high land premium is not the determining factor.”


Secretary for Development Bernadette Linn Hon-ho.

The land sales plan comes after home prices dropped by the most in 14 years in November and look likely to fall again in December in what would be the longest series of monthly declines since the 2003 severe acute respiratory syndrome epidemic. In the first 11 months of this year, the official home price index has fallen 13.8 per cent. From a peak of 398.1 in September last year, the index is down 14.75 per cent.

For the Mong Kok commercial parcel, the government said it would require the developer to provide social and infrastructure facilities such as a community home, a public transport interchange, cross-border coach bus stop and public car parking spaces.

Linn dismissed concerns about the low price achieved for the recent Kai Tak sale, which was about 20 per cent lower than the market valuation. The bid “reasonably reflected the market price” and was above the reserve price set by professional government valuers considering the economic conditions, she said.

The commercial site at the junction of Sai Yee Street and Argyle Street in Mong Kok will be offered for tender.


Revenue from the land sale programme, premium from lease modification among others in the current financial year is likely to reach about HK$120 billion, 15 per cent lower than the takings last year, according to the government’s budget in February.

Property consultants Knight Frank have put the valuation of the Tsuen Wan parcel at between HK$1.1 billion (US$141 million) and HK$1.4 billion, while the Mong Kok commercial parcel is valued between HK$10 billion and HK$12 billion.

The valuations for the plots have been reduced by 5 to 20 per cent after taking into account the result of the Kai Tak tender sale and the prevailing market sentiment, it added.

“The results of the recent land sales have not been very satisfactory,” said Cyrus Fong, head of valuation and advisory at Knight Frank, noting the government’s conservative stance in releasing only one residential site in Tsuen Wan.

This was also evident in last week’s tender announcement. CK Asset agreed to pay HK$8.7 billion for a plot on top of Sung Wong Toi MTR station. The price translates to HK$6,138 per square foot – the lowest for a residential parcel in the area in eight years and almost 25 per cent below market expectations.

Meanwhile, the total private housing land supply in the fourth quarter will support the development of around 3,120 flats. Together with the supply from the first three quarters, it is expected to support some 16,070 flats in the 12 months to March, exceeding the annual target by 25 per cent.

Newsletter

Related Articles

Hong Kong News
Close
0:00
0:00
Tsai Ing-wen received a "warm welcome" from the Chinese people in the US.
EU's von der Leyen: "We know this is an era where we rely on one single supplier. China. 98% of our rare earth supply."
China and Brazil have signed a new deal that will allow them to trade in their own currencies, bypassing the US dollar as an intermediary
Elon Musk and Others Call for Pause on A.I., Citing ‘Profound Risks to Society’
“We've had evidence prior to the pandemic that masks were largely ineffective at preventing community transmission of influenza “
Former Starbucks CEO Howard Schultz:
Former Starbucks CEO Howard Schultz rejects being labeled a "billionaire"
Jamie Dimon is being deposed over JPMorgan Chase role in Epstein lawsuits
Brand new security footage has just been released to the public showing the Active shooter Audrey Elizabeth Hale drove to Covenant Church School in her Honda Fit this morning, parked, and shot her way into the building
Social Media censoring users for saying the true
Smart Iranian fashion designer teaching dummy TV anchors lesson about reality
AMERICA, 2023
U.S. charges FTX's Bankman-Fried with paying $40 million bribe
Fallen 'Crypto King' Who Owes Millions to Investors Was Kidnapped and Tortured
Regulators blame social media for SVB's rapid collapse: 'Complete game changer'
AOC explains why she opposes banning TikTok
Singapore’s Prime Minister says China and US need to stabilize relations because world can't afford a confict between the two superpowers
In a dramatic U-turn against His Government: Judicial Reform Legislation Must Be Halted, Says Israeli Defense Minister Yoav Gallant
Gordon Moore, a co-founder of Intel Corporation, died at 94
Powell: Silicon Valley Bank was an 'outlier'
Bordeaux town hall set on fire in France pro democracy protest
Police violence in Paris
Paris: Some of the police are stepping down and showing solidarity with the protesters.
Donald Trump arrested – Twitter goes wild with doctored pictures
NYPD is setting up barricades outside Manhattan Criminal Court ahead of Trump arrest.
Credit Suisse's Scandalous History Resulted in an Obvious Collapse - It's time for regulators who fail to do their job to be held accountable and serve as an example by being behind bars.
Goldman Sachs cuts outlook for European bank debt over Credit Suisse crisis
Paris Rioting vs Macron anti democratic law
'Sexual Fantasy' Assignment At US School Outrages Parents
The US government has charged Chinese businessman Guo Wengui with leading a $1 billion fraud scheme that cheated thousands of followers out of their money.
Credit Suisse to borrow $54 billion from Swiss central bank
The BBC problem about China
Russian Hackers Preparing New Cyber Assault Against Ukraine
"Will Fly Wherever International Law Allows": US Warns Russia After Drone Incident
If this was in Tehran, Moscow or Hong Kong
Announcing GPT-4
TRUMP: "Standing before you today, I am the only candidate who can make this promise: I will prevent World War III."
China is calling out the US, UK, and Australia on their submarine pact, claiming they are going further down a dangerous road
A brief banking situation report
We are witnessing widespread bank fails and the president just gave a 5 min speech then walked off camera.
Donald Trump's asked by Tucker Carlson question on if the U.S. should support regime change in Russia?.
'No relation to the American SVB': India's SVC Bank acts to calm depositors amid brand name confusion.
Good news: The U.S. government is now guaranteeing all deposits, held by, Silicon Valley Bank, and the funds are available as of today
Silicon Valley Bank exec was Lehman Brothers CFO
In a potential last-ditch effort, HSBC is considering a rescue deal to save Silicon Valley Bank UK from insolvency
Saudi Arabia has announced a major breakthrough in diplomacy with Iran after two years of intense talks
Elon Musk Is Planning To Build A Town In Texas For His Employees
The Silicon Valley Bank’s collapse effect is spreading around the world, affecting startup companies across the globe
City officials in Berlin announced on Thursday that all swimmers at public pools will soon be allowed to swim topless
Fitness scam
×