Hong Kong to offer 1 land plot for housing this quarter in ‘prudent and paced’ approach

The Hong Kong government will sell a single plot of residential land in the second quarter of its financial year as it continues a “prudent and paced” approach during a persistent housing slump, according to the secretary for development.

The residential site in Siu Lek Yuen, Sha Tin, plus an industrial site in Hung Shui Kiu, Yuen Long, will be put up for tender in the three months to September, Bernadette Linn Hon-ho said on Thursday.

The residential site, located at the junction of Sha Tin Wai road and Siu Lek Yuen road, has an area of 5,652 square metres (60,837 sq ft) and can provide a total of 570 units.

“At present, the property market sentiment still remains relatively weak and the interest rate environment is relatively high,” Linn said. “The government has been prudent in launching land sales, and it is appropriate to launch a site in a mature community now.”

Sha Tin has well-established facilities, and the government believes that the site will be well received as developers are more cautious about sites in newer development districts, she added.

“The sites launched this quarter are all small and medium-sized, reflecting that the authorities have adopted a more conservative land sale strategy, which is a prudent and pragmatic approach against the backdrop of the current sluggish market,” said Jason Yeuk-ho, head of land and housing at the Our Hong Kong Foundation.

The industrial site in Yuen Long offers 77,700 square metres for multi-storey buildings.

No commercial site will be put up for sale in the second quarter, Linn said, citing market needs. The office vacancy rate has risen to around 13 per cent, she said.

The last government commercial land sale closed in February 2024, and the government halted all residential and commercial plot sales in the last quarter of 2023 amid poor response and weak sentiment.

In the first quarter, the government offered another residential site in the same area of Sha Tin. The 2,300-square-metre site can support around 280 flats. The tender, which opened in June, will close on July 12.

Linn said she is cautiously optimistic about the tender as the site will be attractive to developers. It is closer to the Sha Tin MTR station and is smaller than the one announced on Thursday, she added.

Sha Tin is convenient to commercial areas in Kowloon and Hong Kong Island, as well as Shenzhen via the East Rail line, said Alex Leung, senior director at CHFT Advisory and Appraisal.

Moreover, there is relatively little new residential supply in the area, he said.

“Steady demand comes from families currently living in Sha Tin, and other districts,” he said.

Bernadette Linn Hon-ho, secretary for development, attends a press conference at Central Government Office in Tamar on September 10, 2023. Photo: Edmond So

The small scale of the two sites could also appeal to smaller developers, Leung added.

Leung said he is pleased that the government is launching the tender for the Hung Shui Kiu industrial site, as it will help the logistics industry to upgrade and transform and help consolidate Hong Kong’s position as an international shipping centre.

In addition to the two sites to be put up for tender in the second quarter, the Urban Renewal Authority will provide 810 units in a project in the Kai Tak area of Kowloon, and three private redevelopment projects will offer another 410 units, bringing the total units provided in the quarter to 1,790.

The total number of units provided through the first half of the financial year will be 4,065, which equals 30 per cent of the year’s supply target of 12,900 units.

For the 2024-25 financial year, a total of eight residential sites, including six unsold ones from the current financial year, will be put up for sale, the government said. The sites are estimated to offer a total of about 5,690 flats.

The rolled over sites are in Stanley, Kai Tak, Sai Kung, Cheung Sha on Lantau Island, Tung Chung and Tuen Mun.

The government has only sold one site in the current financial year: a 1,127-square-metre site on Kai Fuk road in Kowloon Bay. Used for an electric vehicle charging station, it sold for HK$81.98 million (US$10.5 million) in early June, according to the Lands Department.



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