Hong Kong to take more cautious approach to land sales despite expected market ‘uplift’ from removal of property curbs, development chief says

Of the eight residential sites, six were rolled over from the current financial year. They are located in Stanley, Kai Tak, Sai Kung, Cheung Sha on Lantau Island, Tung Chung and Tuen Mun. The two new sites are in Siu Lek Yuen in Sha Tin.

Together with other sources, such as urban redevelopment, private development and rail property projects, the potential supply of flats is estimated to reach 15,150 in 2024-25, higher than the government’s annual private housing land supply target of about 13,000 homes.

Also listed in the 2024-25 programme are two commercial sites in Kai Tak and Shek Mun, providing respectively floor areas of about 80,000 square metres and 40,000 square metres.

Although Queensway Plaza – first proposed for redevelopment in 2016 – was included in last year’s programme, Linn said it was dropped this time because of the market situation.

“I think people can appreciate that under the prevailing market sentiment … It is a treasure site. We are not prepared to include it in the coming year’s land sale programme,” she said.

She disclosed that discussions were under way with tenants there to renew their leases. “In the case of renewal of tenancy, there is a need to allow a reasonable period [for the tenants to operate],” Linn said.

Financial Secretary Paul Chan Mo-po on Wednesday surprised the market in his budget speech by removing decade-long property curbs with immediate effect.

Linn remained cautious about how well the government’s move to scrap the measures could shore up the market or interest in land sales.

“The removal of the various special stamp duties should have an enlivening effect on the market. But as to the extent that it will affect the interest in the land sale, I think a basket of factors will be in force,” she said.

“It also depends on the developers’ strategy and their interest in the individual sites … and their own financial position and their own financing status and capability.

“We do not have a crystal ball and we are not able to assess to what extent the removal of the stamp duties will affect the land sale programme. It should help uplift the market a bit.”

An industrial site in Hung Shui Kui in the western New Territories will also be on offer in 2024-25.

The administration estimated the programme this year would realise HK$33 billion in land premium.

The government planned to sell off 12 residential sites, three commercial plots and three areas designated for industrial use in the 2023-24 financial year.

But only five residential plots were put out to tender by February and two were later withdrawn after they failed to reach their reserve price.

The administration passed a site in Tsuen Wan, designated for a starter home project, to the Hong Kong Housing Society, the city’s second-largest provider of public housing, despite the tender process cancellation.

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The government also announced earlier that it would sell an industrial site in the final quarter of the financial year, which ends on March 31.

The administration expected to raise HK$65.6 billion in land premium fees in the 2023-24 financial year, but the budget statement revealed it only took in HK$19.4 billion – HK$46.2 billion below the target.

Additional reporting by Edith Lin