Chief Executive Leung Chun-ying today announced a series of measures on the government’s housing and land strategies in his fifth and final Policy Address. These include increasing future housing supply; developing Kowloon East; making further use of underground space and rock caverns; and re-organising the land use of brownfield sites for development. Knight Frank believes the Policy Address has set the right general direction for the housing market, but as expected, no major policies were announced. We do not expect there to be any impact on the housing market. Overall, we project housing supply for the coming three to four years to be able to meet targets. But long-term success will depend on future land supply. With success hinging on long-term implementation, we believe there will be major challenges ahead for future administrations of the HKSAR.
Highlights of the 2017 Policy Address on housing and land strategies:
- Increase housing supply over the short, mid, and long term
- Develop Kowloon East and turn Hong Kong into a smart city
- Develop caves, underground spaces, and brownfields
Increasing housing supply:
The Urban Renewal Authority (URA) introduced a holistic and district-based approach for implementing its redevelopment projects in To Kwa Wan, and plans to conduct a district planning study for Yau Ma Tei and Mong Kok on a pilot basis. Knight Frank agrees that the government should have a comprehensive plan for the district to improve the environment, transportation network, and same-district relocation process.
Knight Frank believes that it is essential to develop the Northwest New Territories in the mid-to-long term, but the interests of different parties need to be addressed. Therefore, we recommend the government set up a timetable soon, and begin consulting and planning to change land usage and sell the sites in question.
The boundary crossing facilities island of the HZMB will be undergoing consultation in the first half of this year. Knight Frank agrees the government should commence studies soon to provide alternative source of land supply. Knight Frank also supports the further development of Lantau Island and Tung Chung. There is comprehensive infrastructure already in place in North Lantau including the airport, multiple transport facilities, SKYCITY, and Siu Ho Wan. Therefore, Knight Frank believes North Lantau should be further developed while South Lantau should be used for conservation.
Developing Kowloon East:
Knight Frank supports the development of Kowloon East to increase commercial space. With the shortage of office supply in Central, we expect office supply over the coming 15 to 20 years to come from Kowloon East. We recommend the government accelerates the development of Kai Tak with a clear implementation timetable to develop Kowloon into a prime commercial area.
Furthermore, we support the government’s intention to promote green buildings. With the high construction costs in Hong Kong, we believe sustainable development to support future growth will be an essential aspect of shifting Hong Kong towards becoming a smart city.
Development of rock caverns, underground space and re-organising brownfield sites:
Knight Frank agrees that developing brownfield sites can potentially increase land supply and optimise land usage in the mid-to-long term. We suggest the government increases pilot locations for brownfield site development, and improve communication with land owners and users to align the needs of different parties.
Furthermore, we believe there are huge potentials for developing rock caverns and underground space, which could solve Hong Kong’s land supply problem in the longer term. Knight Frank recommends the government borrow experience from relevant overseas projects, and accelerate the study regarding caverns and underground space development.