Traditional Chinese Simplified Chinese Email this article
Budget Speech by the Financial Secretary (5)

Increasing Land Supply

66. Fifth, we shall continue to increase land supply.  I shall now elaborate on the latest developments in the supply of private housing, public housing and commercial sites as well as urban renewal.

Land Supply

67. Our resolve to increase land supply and create a land reserve is beyond question.  To ensure that land supply will not be affected by economic cycles or fluctuations of the property market, the Steering Committee on Housing Land Supply that I chair will continue to expand land resources in a multi-pronged manner.  This will facilitate the stable development of our property market and meet the needs for our social and economic development.

68. From our rough estimates, the land use studies and reviews being conducted by the Planning Department cover 2 500 hectares of land, equivalent to one-tenth of the developed land in Hong Kong.  We have started public engagement exercises on the planning for new development areas in north east New Territories, Hung Shui Kiu, Tung Chung and various quarry sites, reclamation on an appropriate scale outside Victoria Harbour, and development of caverns.  In the long-term interest of Hong Kong, we look forward to an early consensus in the community on these issues.

69. Appropriately increasing the development intensity of land will help increase the supply of residential flats within a relatively short span of time.  While doing so, we should take into account the public's aspirations for a quality city environment.  We should make optimal use of the development potential of railway-property projects.  After discussing with the MTR Corporation Limited (MTRCL), we have identified the West Rail Kam Sheung Road Station and Pat Heung Depot and the adjacent rural area as having enormous potential for providing more housing land.  The Development Bureau, in collaboration with the MTRCL, will soon launch public consultation on two property projects above the West Rail Kam Sheung Road Station and Pat Heung Depot.  It is estimated that these projects will provide about 8 700 flats, giving impetus to the development of the southern part of Kam Tin.  We shall also invite the MTRCL to explore other opportunities for development along railways.

Private Housing

70. I shall now turn to private properties.  Since last year, apart from retaining the Application List system, we have initiated land sale in a proactive manner and announced our land sale programme in advance on a quarterly basis in response to the market's keen demand for residential sites.  In this financial year, the number of residential sites sold and to be sold by the Government, including those in the land sale programme for the fourth quarter already announced, amounts to 27.  The sites will provide about 7 900 flats in total.  We have stipulated flat size restrictions for three of those sites for the provision of 2 300 small and medium-sized flats, and flat number restrictions for five other sites, which will provide at least 3 800 flats.  These arrangements will help increase the supply of small and medium-sized flats and ensure an adequate supply of residential flats.

71. Turning to West Rail property projects.  The developments at the three sites at Nam Cheong, Tsuen Wan West TW5 (Cityside) and Tsuen Wan West TW5 (Bayside) will provide not less than 6 600 flats in total, of which 65 per cent are small and medium-sized flats with a saleable floor area of 50 square metres or below.  The first two sites have already been sold.  The last will be re-tendered in due course.

72. In 2011-12, through quarterly land sale programmes, the three West Rail property projects I have just mentioned, urban renewal projects, lease modifications or land exchanges by private developers, and private redevelopment projects not subject to lease modifications or land exchanges, sites on which over 20 000 private residential units can be built were provided.  This met the target set by the Chief Executive.

73. The Government will continue to increase land supply in the coming year.  In the Land Sale Programme for 2012-13 to be announced tomorrow, we shall include in the Application List 47 residential sites, of which half are new sites.  They will provide some 13 500 units.  We shall follow the practice of announcing land sale programmes in advance on a quarterly basis, and stipulate flat number or flat size restrictions in land sale in the light of market conditions and the characteristics of individual sites.

74. The major sources of land supply for private residential housing in the coming year include the Government's Land Sale Programme for the coming year, four property projects along the West Rail, three property projects owned by the MTRCL, redevelopment projects of the Urban Renewal Authority (URA), lease modifications or land exchanges, and private redevelopments not subject to lease modifications or land exchanges.  It is estimated that the housing land supply in aggregate in the coming year will provide some 30 000 private residential flats.

Public Housing

75. Turning to public housing.  The Government's public housing policy is to provide public rental housing (PRH) for low-income families who cannot afford private rental accommodation.  According to the latest Public Housing Construction Programme of the Housing Authority, the total production of PRH flats will be 75 000 in the five-year period starting from 2011-12.  Our aim is to maintain the average waiting time for general PRH applicants at around three years.  To this end, the Housing Authority will adjust and increase the production volume when necessary.

76. We shall continue to identify suitable sites for public housing development in various districts.  The Housing Authority will develop the sites to their full potential to maximise public housing supply by relaxing restrictions on plot ratio and building height.  This will be done without compromising the living environment.

New Home Ownership Scheme and My Home Purchase Plan

77. The Chief Executive announced in last year's Policy Address a new policy for the resumption of the Home Ownership Scheme (HOS).  The new scheme will offer flats with a saleable floor area of about 400 to 500 square feet to families with a monthly household income under $30,000, mainly first-time home buyers.  The Housing Authority has initially identified six sites in Sha Tin, Tsuen Wan, Kwai Tsing and Yuen Long for the first batch of developments under the new HOS.  The respective District Councils will be consulted shortly.  The Housing Authority has also initiated discussions on the implementation details of the scheme, including pricing principles and future premium payment arrangements.

78. In addition to the new policy for the resumption of the HOS, the Government, in collaboration with the Hong Kong Housing Society, will continue to implement the My Home Purchase Plan (MHPP) to provide "no frills" small and medium-sized rental flats for families with a relatively higher monthly income of up to about $40,000 so that they will have time to save up.  The Government has already earmarked a number of sites for 5 000 MHPP flats.  The first development project at Tsing Yi will provide 1 000 small and medium-sized flats.  They will be completed in 2014 and application for pre-letting will begin in the fourth quarter of this year.  The second development project at Sha Tin will provide 700 small and medium-sized flats.

Supply of Business Sites

79. Office rental in Hong Kong has remained high over the past few years.  While the soaring rental is an indication of thriving economic activities, it also drives up the cost of doing business in Hong Kong.  This will make Hong Kong less attractive to foreign investors and undermine the competitiveness of local enterprises.  Therefore, we must seek to maintain a stable and sufficient supply of business sites.

80. Last year, the sale of seven sites in various districts for commercial/business use provided an additional 320 000 square metres for office or other commercial uses.  Under the policy to revitalise industrial buildings, by the end of 2011, the Lands Department had approved 40 applications for redevelopment or wholesale conversion of buildings, releasing 410 000 square metres of floor area for commercial use.

81. To sharpen Hong Kong's competitive edge, we must focus not only on the supply of office space, but also on the development of new core business districts, including Kowloon East announced in last year's Policy Address.  Taking advantage of the future office development at Kai Tak and the revitalisation or redevelopment of industrial buildings in Kwun Tong and Kowloon Bay, Kowloon East will develop into another major business district, with office gross floor area increasing from the current 1.4 million square metres to 5.4 million square metres.  The Kowloon East Development Office tasked with this project is expected to be established in the first half of this year.

82. These brand new office nodes, however, will by no means replace the established Central Business District (CBD).  Given their geographical advantages and well-equipped facilities, Grade A offices within the CBD are still in keen demand.  To free Grade A office space currently taken up by the Government for commercial use, we shall continue to reduce our leased office space in Central and Admiralty.  The total gross floor area of office premises leased by the Government in both districts has reduced from 11 500 square metres five years ago to the present level of 4 300 square metres, and is expected to further reduce to 230 square metres in 2015.

83. We shall continue to relocate government departments from core business districts where appropriate.  The Legislative Council has approved an appropriation of nearly $800 million for the relocation of a Water Supplies Department facility in Mong Kok to an industrial building in New Territories West.  The Mong Kok site, together with the neighbouring Food and Environmental Hygiene Department depot and temporary car park, will be developed into a commercial property.  It will provide 65 000 square metres of office gross floor area according to our preliminary estimate.

84. This Council has also approved another funding of $2.6 billion for the construction of the Trade and Industry Tower at the Kai Tak Development Area.  Upon its completion by the end of 2014, 18 000 square metres of gross floor area in the Trade and Industry Department Tower in Mong Kok will be released for commercial use.  Also in the pipeline are the relocation of the Department of Justice to the Main and East Wings of the old Central Government Offices, development of a government office building in West Kowloon and the phased relocation of the departments in the three government office buildings at the Wan Chai waterfront.

Urban Renewal

85. Building dilapidation, unauthorised building works and "sub-divided units" were issues of grave public concern last year.  While a series of measures have been implemented by the Government to improve building safety, many people still consider that speeding up the redevelopment of old buildings a more effective solution.  This will also release urban sites for housing development.  We have asked the URA to assume its new roles as set out under the new Urban Renewal Strategy announced last February.  Apart from initiating redevelopment projects on its own as "implementer", the URA will take forward "demand-led" schemes and act as "facilitator" to help owners of old buildings carry out redevelopment.

86. Since its establishment, the URA has been focusing on residential redevelopment.  We need to accelerate the renewal of old industrial areas to release more sites for residential or commercial development.  Many industrial buildings are situated on lots already rezoned for other uses and can benefit from the policy initiatives of revitalisation.  However, their redevelopment is held back by multiple ownership.  The same problem of multiple ownership in industrial buildings also presents the greatest challenge to Energizing Kowloon East.

87. In view of this, I propose to invite the URA to launch redevelopment projects of industrial buildings in the form of a pilot scheme.  After trying out the pilot scheme, we shall review the situation and consult the public before deciding on the level of long-term commitment of the URA on the redevelopment of industrial buildings.  Subject to the results of the pilot scheme, I shall propose to make another injection to the URA when necessary.  The additional resources will ensure that the URA's task of improving the living environment of people residing in old buildings will not be affected if the URA becomes heavily involved in the redevelopment of industrial buildings in future.

Strengthening Our Social Capital

88. We strive for economic development to better people's livelihood.  To this end, while following our established strategy of "Market Leads, Government Facilitates", we endeavour to provide a platform for building social capital so that the "big society" between the market and the Government may flourish.

89. The Community Investment and Inclusion Fund was set up in 2002 to promote social capital development through encouraging mutual support in the neighbourhood, community participation and cross-sectoral partnerships.  Since its establishment, the Fund has subsidised 238 projects rolled out by more than 130 organisations involving over 560 000 participants.  There have been notable achievements in capacity building, enhancement of interpersonal relationship and development of community networks.  I propose to inject an additional $200 million into the Fund to ensure that it can continue to perform its social function in furthering social capital development at the district level.

90. Since its establishment in 2011, the Community Care Fund (CCF) has launched over ten assistance programmes, benefiting several hundred thousands of people.  Such programmes include the provision of a lunch subsidy for students from low-income families, and a subsidy for Hospital Authority's patients using specified self-financed cancer drugs.  Initiatives can be implemented on a pilot basis under the CCF to help the Government identify measures to be incorporated into its regular assistance and service programmes.  Upon examining the effectiveness of individual programmes, we shall decide the appropriate ones to be incorporated into the Government's regular assistance programmes, subject to the views of the Steering Committee on the CCF.  I shall make the corresponding financial arrangements.

91. Last year, I asked the HKMC to study the feasibility of establishing a microfinance scheme in Hong Kong to assist people who may wish to start their own businesses or take self-enhancement training but cannot do so due to a lack of financial means or difficulties in obtaining loans from traditional finance sources.  Having considered the results of the study, I decided to commission the HKMC to introduce a three-year pilot scheme in co-ordination and collaboration with banks, voluntary organisations and other stakeholders.  The scheme will be operated on a self-financing basis with supporting services provided to make microfinance more viable.  The maximum loan amount of the pilot scheme will be capped at $100 million tentatively.  The target borrowers are business starters, self-employed persons and people who wish to receive training, enhance their skills or obtain professional qualifications for self-improvement.  The repayment period will be as long as five years and the interest rate will be set with reference to that of the personal loans charged by banks in general.  The HKMC will announce the details in due course.

(To be continued)

Ends/Wednesday, February 1, 2012
Issued at HKT 12:04


Print this page