Chief Executive Leung Chun-ying today announced a series of measures concerning the government’s housing and land planning in his second Policy Address, including site rezoning and reclamation to boost land supply for residential use, and continuing to implement the existing demand management measures. Outlining long-term and macro development plans, Knight Frank thinks that the Policy Address has set a right direction for the long-term property policy of Hong Kong. Knight Frank also believes that how the government is going to establish and accelerate the implementation timeline and whether the government is able to keep up the momentum of enforcement will be the determining factors for success.
Highlights of the 2014 Policy Address:
1) Rationalise land administration processes of the Lands Department and introduce a Pilot Scheme for Arbitration on Land Premium to facilitate early agreement on land premium payable by way of arbitration.
2) Lifting of the development moratorium at the south of Pok Fu Lam with area close to Wah Fu Estate and the future redevelopment of Wah Fu Estate; review the planning of Kai Tak New Development Area; and thus to increase supply for residential and commercial uses.
3) Increase land supply for commercial and business uses in the existing core business areas of Central and Wan Chai through land sales and speed up the process of converting suitable Government, Institution or Community (GIC) sites in the areas.
4) Develop North East New Territories, Lantau Island and Hung Shui Kiu and actively take forward further studies such as reclamation in order to increase long-term land supply.
5) Railway property developments, for example the residential developments above Kam Sheung Road Station and Pat Heung Maintenance Depot, remain a major source of housing supply.
Alnwick Chan, Executive Director at Knight Frank, welcomes the Pilot Scheme for Arbitration on Land Premium proposed by the government. He says, “The independent third party arbitration mechanism will facilitate the land premium negotiation process between developers and the government and will increase the level of independence and fairness of the land premium process.”
Regarding the government’s plans to increase long-term land supply by developing Lantau Island and Hong Shui Kiu, increasing the development density of Po Fu Lam and Kai Tak and reclamation, Alnwick says, “The Policy Address has set a right direction for outlining development blueprints. First of all, this will maximise the effect of the large-scale infrastructure in those areas, such as the Hong Kong-Zhuhai-Macao Bridge in Lantau Island. This will also be beneficial to the tourism, exhibition and hotel industries in those areas. In the long term, the measures will also help create a synergy effect with the Nanshan and Qianhai districts in Shenzhen. Nevertheless, environmental conservation should not be neglected. While increasing development density and reducing restrictions, transportation and infrastructure should be carefully planned to achieve sustainable development.”
Thomas Lam, Director and Head of Research & Consultancy, Greater China at Knight Frank, supports the government’s plan to set aside land in Tuen Mun for logistics use. “Hong Kong is currently in lack of logistics centres and storage location has become an unresolved problem in the market. Given no solid timetable from the Policy Address, we hope that the government could speed up the execution of land planning.”
Concluding the housing strategies and supply target proposed by the Policy Address, Thomas Lam adds, “The new policies on housing and land are long-term macro development plans that will not come online until 2020 the earliest, including the extension of the Tung Chung New Town, rezoning Green Belt sites for residential use and the lifting of the development moratorium in the Wah Fu Estate area to the south of Pok Fu Lam. With a long implementation time involved, it is inevitable that these policies will involve the next 2-3 terms of the HKSAR government. Whether these policies could be implemented persistently and consistently with balanced benefits of various parties will be the key to success. We look forward to the government’s release of solid action time tables for the relevant policies with more transparency by releasing more information to the public.”