Ongoing land creation key to ensure Hong Kong government is in control of supply: John Lee

Hong Kong’s leader has said creating land continuously is necessary to guarantee that the government is in control and can protect people’s interests, dismissing a former chief executive’s concerns about the risks of oversupply.

Chief Executive John Lee Ka-chiu on Tuesday addressed concerns raised by former city leader Leung Chun-ying, who earlier warned that a sharp increase in land supply without accurately estimating the demands in coming years might result in negative equity and fiscal challenges for the government.

In defending his approach, Lee referred to when the government halted land creation and froze sales in the early 2000s in response to a market downturn, which he said had led to “undesirable” outcomes.

“Experience tells us that insufficient land creation resulted in insufficient supply, out-of-control property prices and difficulties for residents seeking home ownership,” he said.

“For the housing market to develop healthily, the government must seize control of the land issue. Otherwise, those with vested interests will be in the driving seat, which is not in the interests of residents.”

Speaking before a weekly meeting with the Executive Council, a key decision-making body, Lee said the government could always reserve lands, just like how it placed the spare funds in the bank instead of spending them all.

“Land creation often takes a long time. We have to create them continuously. When necessary, we can release land to the market for property development. Otherwise, we can keep it in our land reserve,” he said.