Hong Kong should reassess its demand for land, taking into consideration structural economic changes and the government’s operating budget deficit, a leading finance policy adviser and a veteran surveyor said as the city leader dismissed his predecessor’s concerns about oversupply.
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Professor Liu Pak-wai, a director at the Hong Kong Institute of Monetary Research under the city’s de facto central bank, made the call amid concerns in Beijing over developers’ reluctance to participate in government-led projects. Some observers said the companies were worried about a drop in land value if there was an excess of supply.
Former chief executive Leung Chun-ying, now a vice-chairman of the country’s top political advisory body, the Chinese People’s Political Consultative Conference, warned last month of a potential oversupply of land in the slow market, highlighting costly reclamation at a time of fiscal deficit.
But current leader John Lee Ka-chiu explained it was necessary to create a land bank to ensure the government was in control of supply.
Liu told the Post in an interview: “We shouldn’t stop producing land because of cyclical changes … but I believe Hong Kong’s economy is experiencing some structural changes given the intensifying geopolitics and integration with the mainland.
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“It’s timely to review and assess the demand for land, and how the government can pace the land production process.