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Budget Speech by the Financial Secretary (7)

Stabilising Land Supply

99. The Chief Executive detailed in his Policy Address specific measures to increase land and housing supply.  I shall continue with my co-ordination work to expand the land reserve as in the past two years.  I shall also allocate additional resources to the relevant departments to increase their manpower in order to speed up land supply.  I shall allocate $4.5 billion in the coming five years to carry out studies and design work and progressively roll out the land development projects relating to reclamation outside Victoria Harbour on an appropriate scale, opening up of new development areas and the development of caverns.

Increasing Residential Land

100. Regarding land supply for private housing, the Government's aim is to maintain on average the provision of land for building about 20 000 residential units each year.  The Government will continue to increase land supply in the coming year.  In the 2013-14 Land Sale Programme, we shall include 46 residential sites, which is capable of providing about 13 600 units in total.  Amongst these sites, 28 are new sites.  We shall continue the practice of announcing government-initiated land sale arrangements in advance on a quarterly basis, and exercise flexibility in supplying housing land in the light of market demand.  In the coming year, all the major sources of land supply for private housing together, which include the Government's Land Sale Programme, railway property development projects, projects of the Urban Renewal Authority, and lease modifications/land exchanges or other private developments, will provide land capable of building some 25 800 private residential flats.  The Secretary for Development will announce the Land Sale Programme for the coming year tomorrow.

101. On public housing, we have provided the Housing Authority with adequate land to build 79 000 public rental housing flats within five years from 2012-13, and about 17 000 Home Ownership Scheme flats within four years from 2016-17.

Supply of Private Residential Flats in Short Term

102. I announced two demand-side management measures last Friday in a bid to cool down the overheated property market.  I will not repeat the details of the measures today.  Increasing supply is the key to solving the housing problem.  In the next three to four years, it is estimated that a total of 67 000 first-hand units would come onto the private residential property market, the highest since September 2007.  These include 4 000 unsold units in completed projects, 48 000 unsold units under construction, and 15 000 units to be constructed on disposed sites.

103. As for the supply of private residential flats in 2013, I estimate that 24 000 first-hand units can be offered for sale this year, including 12 000 uncompleted units, for which we are speeding up the processing of their pre-sale consent applications, 8 000 uncompleted units ready for pre-sale and 4 000 unsold units in completed projects.

104. Developers usually adjust the pace of sales according to market appetite, and may not put all the 24 000 flats on the market this year.  However, we are sure that the supply of first-hand units has seen a rebound.  As the external economic environment remains volatile, I would like to remind people once again that interest rates are susceptible to various external factors and will resume an upturn cycle in the future.  Before making a home purchase decision, people should assess their ability to afford the property, particularly whether family income can support mortgage payments if mortgage rates are to revert to a normal level.

Increasing Commercial Land

105. Apart from housing land, the Government is also committed to increasing the supply of commercial land to provide room for further development of different economic activities in Hong Kong.  Rentals of Grade A offices started to drop last year.  This had much to do with the external slowdown and uncertain outlook.  The 2013-14 Land Sale Programme will include nine sites for commercial/business use and one "hotel only" site, providing a total floor area of about 330 000 square metres and some 300 hotel rooms respectively.

106. We shall expedite the development of the Kowloon East core business district.  Upon completion, it will be able to provide an office floor area of four million square metres.  In addition, we are considering speeding up the release of two clusters of government sites for commercial development in Kowloon East, including assessing the feasibility of relocating the government facilities there.  The two clusters of sites will provide a floor area of 500 000 square metres.  We shall also discuss with the AA ways to accelerate the development of the North Commercial District on Chek Lap Kok Airport Island.

107. There is a huge demand for office space in the Central Business District (CBD) in Central.  We shall continue to relocate government departments from the CBD to release more office space to the market.  The relocation of the Independent Commission Against Corruption to North Point has freed a prime site at Murray Road.  Upon completion of the zoning procedures, the site can provide some 40 000 square metres of Grade A office space.  The completion of the new Trade and Industry Tower at the Kai Tak Development Area by end-2014 will release more than 18 000 square metres of floor area in the Trade and Industry Department Tower in Mong Kok for commercial use.

108. The Department of Justice plans to relocate to the old Central Government Offices in 2015, vacating its offices in Queensway Government Offices for use by other government departments currently occupying commercial office premises in Central and Admiralty.  This will release office space in the districts to the market.  By then, the floor area of our leased office space in Central and Admiralty will reduce from the present level of over 2 700 square metres to less than 230 square metres.

109. We are now proceeding with the relocation of departments in the three government office buildings at the Wan Chai waterfront.  This is a large-scale project, involving 29 departments and more than 10 000 staff.  Upon the relocation in phases of government departments to the new government office buildings in West Kowloon, Kai Tak and Tseung Kwan O, we shall rent out the floor space released to increase the supply of Grade A offices in Wan Chai.  We shall put up the three government office buildings in Wan Chai for sale in due course, which is expected to provide a floor area of 175 000 square metres.

(To be continued)

Ends/Wednesday, February 27, 2013
Issued at HKT 12:08


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