LCQ22: Supply of residential flats

     Following is a question by the Hon Kwok Ka-ki and a written reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (June 26):


     The Chief Executive (CE) pointed out in this year's Policy Address that the Government would take a number of strong measures to increase housing land supply in the short to medium term.  He estimated that a total of 67 000 first-hand units should come on the market in the next three to four years.  However, according to the land sales records of the Lands Department, only about 9 200 units were involved in the private residential developments for which Pre-sale Consents were issued between the third quarter of 2012 and the first quarter of 2013.  In this connection, will the Government inform this Council:

(a)  of the target numbers of Pre-sale Consents and Certificates of Compliance to be issued in each quarter of the next four years, as well as the number of units involved; how the Government ensures that a total of 67 000 first-hand units will come on the market in the next three to four years as mentioned by CE; whether, according to the latest estimate, such target can be achieved; if it cannot, of the reasons for that, whether any remedial measures have been taken, and whether it has assessed the impact of such situation on property prices; if such an assessment has been made, of the details;

(b)  how the Government monitors the trend of residential property prices in Hong Kong; whether it has regularly reviewed the effectiveness of the monitoring measures; if it has, of the review outcome; of the respective changes in the sale price indexes of first-hand and second-hand residential units in each quarter between July 1, 2012 and May 31, 2013;  

(c)  as CE announced in August last year that 36 sites originally designated for "government, institution or community facilities", measuring 27 hectares in total, as well as other government sites, would be rezoned for housing development, of the latest development in this respect;

(d)  as it has been stated in the Policy Address that 13 sites in Green Belt areas, measuring 57 hectares in total, which are devegetated, deserted or formed, are suitable for rezoning for residential use, of the latest development in this respect;

(e)  as it has been stated in the Policy Address that 16 industrial sites, measuring 30 hectares in total, are suitable for rezoning for residential use, of the latest development in this respect;

(f)  of the number of residential sites sold by the Government each year from 2009 to May 31 of this year, together with a breakdown in table form by the class of residential sites (i.e. Residential Site Class A, B, C and D);    

(g)  of the number of residential sites, as estimated by the Government, which will be sold each year from this year to 2017, together with a breakdown in table form by the class of residential sites;

(h)  of the number of applications for Pre-sale Consents being vetted for approval as at May 31, 2013, and the number of residential units involved; and

(i)  of the numbers of Certificates of Compliance and Consents to Assign issued by the Government during the period between 2009 and May 31 this year, as well as the respective numbers of residential units involved (set out in the attached table)?



     The figure of around 67 000 first-hand units in the private residential sector in the next three to four years is estimated with regard to information available to the Government on land supply and the progress of developers obtaining, for individual projects, development approvals at different stages.  The figure includes unsold units of completed projects, units under construction but not yet sold or not yet offered for sale, and units from the disposed land where construction may start anytime.  Nevertheless, the actual supply of private housing units from different private housing land supply sources depends on the actual design of buildings and construction progress of the developments, as well as when the developers will put up the units for sale in the market.  These are commercial decisions and marketing strategies at the sole discretion of developers that are beyond the control of the Government.  

     As land supply is one of the important factors that affect property prices, the Government's aim in respect of private housing land supply 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 to meet the market demand for private housing.

     I reply to the various parts of the question as follows:

(a)  The Government has not set any target for issuing pre-sale consents and Certificates of Compliance for each quarter in the next four years.   The reason is that these figures would be affected by an array of factors, such as the construction progress of individual projects, the marketing strategies of individual developers and whether all the required documents have been submitted in a timely manner.  Nevertheless, the Government has already implemented measures to expedite the process of granting pre-sale consents.  The Lands Department (LandsD) has redeployed its resources and will endeavor to meet the developers, their Authorised Persons and solicitors to discuss pending issues regarding their applications, as and when necessary and practicable, with a view to expediting the approval of pre-sale consents.

(b)  The price indices for all classes between July 2012 and April 2013 as published in the Rating and Valuation Department's Hong Kong Property Review (Monthly Supplement) in June 2013 are set out in Annex A.  The price indices cover all transactions in the secondary market.  For the primary market, the Government does not compile similar indices.  This is because developers may adopt different marketing strategies for different developments and thus sale prices of first-hand units vary significantly.  Also, the transaction volume of the primary market is relatively small.  Most of the transactions involve the sale of uncompleted units and the length of the pre-sale period varies.  As a result, the situation cannot be accurately reflected by a generic price index.

     The Government has been continuously monitoring the residential property market, with reference to a basket of indicators including property prices, the housing affordability of the general public, the volume of property transactions, the supply of residential properties, mortgage payments, rent-to-income ratio, etc., and has introduced appropriate measures to ensure its healthy and stable development.

(c)  The Planning Department (PlanD) has proposed that 36 Government, Institution or Community (GIC) and other Government sites, with an area measuring about 27 hectares in total, be converted for housing development.  They are estimated to be capable of providing about 11 900 public and private residential units.  As at June 19, 2013, 16 of these sites had been zoned or were going through town planning procedures for rezoning for residential use.  PlanD is also preparing for the rezoning of the remaining 20 sites, and has consulted the respective District Councils for the rezoning proposals of five of the sites.  PlanD will continue to process the rezoning of the remaining sites as a matter of priority, and identify sites currently zoned for GIC uses and other Government sites for rezoning to housing use without affecting the provision of community facilities.

(d)  In PlanD's Stage 1 Green Belt (GB) Review, 13 GB sites which are devegetated, deserted or formed, measuring about 57 hectares in total and are estimated to provide about 23 000 residential units, are recommended for rezoning for residential use.  PlanD has progressively commenced the rezoning work for these GB sites.  The rezoning of one of the sites located at the junction of Clear Water Bay Road and Pik Sha Road for residential use was gazetted on May 10, 2013.   As for the remaining 12 sites, it is estimated that the rezoning procedures for nine of them will be completed by late 2014, and the rezoning of the other three sites will be completed as soon as possible afterwards.  PlanD's Stage 2 GB Review is also underway with a view to identifying more sites suitable for rezoning for residential use.

(e)  In its last round of review of industrial land in 2009, PlanD proposes to rezone 16 sites measuring 30 hectares in total for residential use.  Amongst these sites, 13 (including eight privately-owned sites and five Government sites) have completed or are undergoing the rezoning process, and are estimated to be capable of providing about 14 600 units upon redevelopment.  PlanD will commence the rezoning of the three remaining privately-owned sites at a later stage, which are estimated to be capable of providing about 5 800 units upon redevelopment.

(f)  The figures of various types of residential sites sold by the Government from the 2009-10 to 2013-14 financial years (as at mid of June 2013) and residential sites not yet sold in the 2013-14 Land Sale Programme (LSP) are at Annex B.

(g)  The results of the Government's sale of land is dependent on market factors.  The Government does not estimate the number of various types of residential sites to be sold after 2013-14.  The Government will continue to announce the annual LSP in each financial year and set out sites estimated to be available for sale, and make quarterly announcements of sites to be made available for sale in the respective quarters in advance, so as to provide a transparent and certain land supply programme to the market, and at the same time allow the Government to respond to market demand and adjust the pace of land sale, in order to maintain a steady supply of land to the market.

(h)  According to the records of LandsD, there were a total of 26 residential developments awaiting approval of pre-sale consents as at May 31, 2013, which involves a total of 14 975 units.

(i)  According to the records of the Transport and Housing Bureau and LandsD, the numbers of Certificates of Compliance and Consent to Assign issued by the Government between 2009 and May 31, 2013, and the number of residential units involved, are set out at Annex C.

Ends/Wednesday, June 26, 2013
Issued at HKT 14:40