Hong Kong to sell smaller plots of land to boost sales amid slow economy, development chief says

“It is understandable that the atmosphere for land sales is not as good as it was before when our economy was better, and developers might want to be more careful while they have to deal with their funding sources.”

But she said past experiences suggested that developers were more interested in smaller plots of land during an economic downturn, adding authorities would put up smaller sites to boost sales.

“Regarding land sales, how can we attract developers to bid? I think our past experience showed us that it may be easier for them to develop relatively smaller plots of land when the economy is not doing well,” she said.

“So when we have some larger pieces of land, we can think about whether we should divide them into smaller plots … we do not have to decide on the exact plots now, we can decide when we plan to sell the land in a certain quarter.”

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Linn said another way to boost interest was to provide more details such as infrastructure and facilities required when tendering sites in new development areas in districts like Tung Chung, Kwu Tung North, Fanling North, to ensure that developers were well informed.

The government surprised the market last week when it announced that it would not sell any residential or commercial sites through tender in the last quarter of this financial year, the first time in 13 years. Only one industrial site was picked for sale.

Linn had said the decision was made in response to failed tenders and prevailing market conditions.

The total land supply in the current financial year ending in March is expected to provide about 11,530 flats, about 10 per cent less the annual target of 12,900 flats authorities were aiming to deliver over the same period.

The minister stressed on Saturday that the arrangement was temporary, arguing the supply expected so far was already close to the annual target for private homes.

She added the government would not stop creating new land and the annual supply of private flats in the next five years would reach 19,000.

“We are not worried that the current land sales plan will affect future completion figures,” she said.

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Despite proposals from some politicians to slow down the development of the Kau Yi Chau artificial islands near Lantau in response to a huge estimated budget deficit, Linn reiterated the government’s determination to advance the mega project, along with the Northern Metropolis plan.

The Northern Metropolis plan aims to develop a 30,000-hectare area near the border with mainland China in the New Territories to provide housing and jobs with an “industry-driven” development approach.

Linn said she was confident that both projects would be financially sustainable but added that authorities would only decide on the overall budget after determining the land uses later this year.

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Linn stressed that the city “definitely” needed land for future developments, and the government would not stop land production.

“We should not worry or hesitate because of the current economic situation. We must complete the development of these 3,000 hectares of land, and the project will span more than 10 to 20 years,” she said.

“Provided that we have good plans in deploying, phasing and financing the projects, we will definitely make it.”