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B. Giving Priority to Livelihood Issues
Housing Policy
11. Housing is currently the greatest concern of our people. The Government’s housing policy is premised on three principles. First, the focus of the Government's subsidised housing policy is to help the low-income group who cannot afford private rental accommodation by providing public rental housing (PRH). Second, apart from PRH, the major role of the Government is to supply land. The Government should refrain from participating in subsidised housing schemes as far as possible, and minimise intervention in the property market. Third, the Government will ensure sufficient land supply and provide quality infrastructure to maintain a fair and stable environment for the healthy and sustainable development of the property market.
12. Over the past few years, private housing supply has been relatively low. In September, private residential property prices rose by 20% year-on-year. The mortgage-to-income ratio in the second quarter was 41%, which, even though lower than the average ratio of 53% over the past 20 years, is on a rising trend.
13. We should address the fundamentals by increasing land supply in response to market demand. We will create a land reserve, use the Application List system as the main axle, and supplement it by a government-initiated land sale arrangement, to ensure that there will not be any shortage in housing land supply. Under normal circumstances, the market itself will adjust its demand for land. But if there is an upsurge in residential flat prices and developers do not actively apply for land under the Application List system, the Government will on its own initiative put up for auction land suitable for building various types of residential flats, including land designated for small and medium units, to stabilise flat prices.
Land Supply
14. Under the "Hong Kong 2030 Planning Vision and Strategy", we will have sufficient land to meet our housing needs if we optimise the use of existing development areas and new towns, and develop the Kai Tak Development Area and other new development areas in the northern New Territories. Nevertheless, housing land has been in short supply over the past few years because of a number of challenges in land development, including the re-planning of southern Tseung Kwan O to lower its overall density, adopting "zero reclamation" for the new design of the Kai Tak Development, reviewing high-density development projects, and tackling various problems arising from statutory procedures.
15. These challenges must be overcome if we are to implement the concept of "progressive development" that I advocate. After several years of strenuous efforts, a consensus has been reached in the community –– Hong Kong must not stay put. Having carefully considered the opinions of different parties and striking a balance as far as practicable, we must put development plans into action. The Government should also think out of the box to review existing land uses and explore new land resources. We have completed a study on industrial sites across the territory, and proposed to rezone about 30 hectares of land for residential use. We have also lowered the threshold for compulsory sale of land for redevelopment to facilitate the redevelopment of more old buildings. Later, we will consult the public on the proposal for reclamation on an appropriate scale outside Victoria Harbour to generate more land in the long run. In addition, we are devoting resources and expediting internal procedures to make more residential sites available to the market. Next year, for example, we plan to put out to the market the former North Point Estate site and the Ho Man Tin site returned by the Housing Authority, as well as other sites in various districts including Tung Chung and Tseung Kwan O. Also, we will speed up infrastructure construction at the Kai Tak Development Area so that some residential sites in the area can be made available to the market earlier, in 2015.
16. Last year, I pledged to monitor changes in the private residential property market, fine-tune land supply arrangements and discuss with the Urban Renewal Authority (URA) and MTR Corporation Limited (MTRCL) ways to quicken the pace of bringing residential sites to the market.
17. Subsequently, the Financial Secretary announced that the Government would put up specific sites on the Application List for sale by auction or tender to increase land supply. As at end-September, a total of eight sites were sold, of which three were put up for auction by the Government and five were triggered by developers from the Application List. Altogether, these sites can provide some 4 700 flats. Taking into account further sites made available through lease modifications and land exchanges with premium paid, as well as projects to be tendered by the MTRCL and URA, and other private redevelopment projects not subject to premium payment, we estimate that a total of 61 000 first-hand private residential units will come on the market in the next three to four years.
18. In the past 10 years, the average annual take up rate of first-hand private residential flats was 18 500 units. To ensure a healthy and stable property market, in the next 10 years, on average land needs to be made available annually for some 20 000 private residential flats. I need to stress that this is not a fixed target for residential flat production. Our aim is to build up a sufficiently large land reserve over a period of time to ensure stable land supply for the residential property market. In particular, we need to make available sufficient land for building small and medium residential flats to keep their prices stable.
19. To achieve this objective, the Financial Secretary will chair a "Steering Committee on Housing Land Supply" to co-ordinate the efforts of the departments concerned. This will ensure that issues relating to housing land will be dealt with as a matter of priority to guarantee a stable and adequate supply of such land. Members of the committee will include heads of bureaux and departments.
(To be continued)
Ends/Wednesday, October 13, 2010
Issued at HKT 11:16
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