From Housing Market Outlook to Land Supply Strategy

Our Hong Kong Foundation’s (OHKF) research “From Housing Market Outlook to Land Supply Strategy” points out that, despite an expected increase in near-term housing supply, there exists a substantial housing demand yet to be met. Hence the government must continue its efforts in boosting land and housing supply. 

It is encouraging that, land supply has sharply increased in recent years. OHKF expects the annual average private housing unit completion for 2016 to 2019 would be approximately 18,000 units, satisfying the supply targets set by the government and representing a 60%-increase compared with the average figure for the previous decade. 

However, supply of public housing units still trails behind, falling 30% short of the government 5-year supply target. Supported by demographic structure and family formation, housing demand will continue to be strong. Relevant statistics suggests that there still exists a substantial housing demand to be met in Hong Kong. 

Medium-term land supply situation still warrants great concerns. Analysis shows that a lack of large-scale land development projects over a prolonged period of time in the city has contributed to the dwindling of readily developable land in the hands of the government, rendering its increasing reliance on sites that needs to go through rezoning processes to satisfy land demand.

OHKF does not support the notion of the “Brownfield First” principle, or a policy that prioritise any particular land supply avenue. It is because the development of brownfield sites inevitably involves an abundance of land resumption, resettlement and compensation, which could be extremely time-consuming and does not help to alleviate current housing demand. Instead, land supply should follow a multi-pronged approach, encompassing short-, medium- and long-term measures to provide developable land, including reclamation and developing new towns. 

Therefore, as suggested in the first research report of OHKF published last year, the government should start establishing a land reserves for the long-term development needs of Hong Kong.