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2016 Policy Address by Chief Executive (4)

V. Housing, Land and Transport


90. Housing is still the most important livelihood issue we have to address.  Exorbitant property prices, high rentals, small living spaces, the proliferation of subdivided flats and record high PRH applications all tell us clearly that we must tackle the housing problem with resolve and perseverance.  

91. Since taking office, the current-term Government has stated its determination to increase housing supply and curb property speculation and overheated investment.  It has also reminded the community of the need to watch out for fluctuations in the property market caused by a long period of ultra-low interest rates and low supply.  

92. Our efforts over the past three and a half years have produced results.  The housing supply has significantly increased and property prices and rentals have started to fall, reversing the perception that property prices and rentals can only go up.  Some people wonder whether the Government will relax the demand-side management measures or even reduce land supply.  In the past three and a half years, other government officials and I have reiterated the Government's courage and determination to tackle the housing problem and there should be no doubt in this regard.  While it is the Government's responsibility to provide land and public housing to cater for the housing needs of the public, it is not the Government's duty to ensure that property prices can only go up.  Neither should property prices be kept at a high level by generating a man-made shortage.  The current property price and rental levels are still beyond what people can afford, and have distorted the values of the younger generation.  We should continue to tackle the housing problem head-on and must not concede.  

93. The Housing Authority and the Hong Kong Housing Society (HKHS) will, over the next five years, produce about 97 100 public housing units, of which about 76 700 will be PRH units and about 20 400 will be subsidised sale flats.  This latest production forecast is higher than similar forecasts starting from 2013-14 and 2014-15.  

94. The Housing Authority and HKHS will put up a total of about 3 700 flats for pre-sale this year.  Another batch of about 2 600 flats in total will be put up for pre-sale in 2017.  

95. Last year, I proposed that as a pilot scheme, the Housing Authority should identify suitable flats among its PRH developments under construction for sale to eligible Green Form applicants to further improve the housing ladder.  The Housing Authority has selected the PRH development at San Po Kong for this purpose and worked out the implementation details.  Around 860 flats are expected to be provided for pre-sale in the second half of this year and for occupation in mid-2017.  

96. On private housing, projected supply from the first-hand residential property market for the coming three to four years is approximately 87 000 units, a record high since the first release in September 2004 of the quarterly statistics on supply.  


97. Land is fundamental to Hong Kong's social and economic development.  What Hong Kong lacks is not land, but land that is developable.  The root of many social, economic and livelihood issues often lies in the fact that land planning and development fail to keep pace with the growth in demand.  Since taking office, the current-term Government has been increasing land supply through a multi-pronged approach and addressing the supply-demand imbalance by formulating short, medium and long-term measures.  Nevertheless, land development is often met with resistance, and may affect vested interests.  

98. As for land supply, we need to have long-term planning to build up a land reserve for our next generation.  

Short and Medium-term Land Supply

99. In the short and medium term, the Government will continue to rezone sites, increase development intensity and conduct holistic land use reviews to make optimal use of land.  By the end of last year, the Town Planning Board (TPB) had approved applications for relaxing the development intensity of 41 housing sites, which will lead to an additional supply of about 7 750 units.  

Review of Land Use

100. In the 2014 Policy Address, I announced that the Government had identified some 150 potential housing sites through land use reviews and would seek to make most of these sites available for housing development in five years to produce over 210 000 flats, with over 70% for public housing.  Proposals to amend the statutory plans of 63 of these sites have been submitted to the TPB over the past two years.  This is expected to provide about 74 400 housing units, including 42 500 public housing units and 31 900 private housing units.  To date, the statutory planning procedures for 46 of these sites (capable of producing about 41 000 flats) have been completed.  

101. Apart from the sites mentioned above, the 2013 Policy Address also mentioned a number of initiatives to increase land supply, including the identification of 42 sites which might be used for residential development in the short and medium term.  These sites were zoned or undergoing rezoning for such use in 2013 and are expected to provide about 39 200 flats in total, including 23 500 public housing units and 15 700 private housing units.  At the end of last year, 38 of the sites (capable of producing about 38 600 units) had been allocated for residential use.  

102. The Government is determined to identify more sites, and will consider slightly expanding the area of certain sites to generate an additional supply of about 17 000 units, 90% of which will be public housing units.  

Development of Former Quarry Sites

103. The statutory planning procedures for the ex-Cha Kwo Ling Kaolin Mine site and the Anderson Road Quarry site have been completed.  The two development projects will provide over 11 000 residential units and over 25 000 square metres of commercial floor area.  The aim is to have the units ready for occupation progressively from 2023 to 2024.  

Land Sale Programme

104. In 2014-15, the Government sold 20 residential sites.  Together with other sources of supply, about 21 200 private residential flats can be produced, exceeding the target of 18 800 set for the year and being a record high since 2010.  

105. In 2015-16, a total of 16 residential sites were sold or will be put up for sale under the Land Sale Programme.  Together with other private housing land, it is estimated that about 20 300 flats can be produced.  This is higher than the target of 19 000 flats, and the second highest since 2010.  

106. Since July 2012, the MTRCL has successfully tendered 13 railway property development projects, which will provide about 21 800 residential units.  The Government is actively exploring with the MTRCL the development potential of stations and related sites along existing and future rail lines.  The preliminary estimate is that such sites, including the Siu Ho Wan Depot in Lantau, can provide over 12 000 flats.  

107. The Government will continue to increase private housing supply through a multi-pronged approach, which includes putting up land for sale and encouraging the MTRCL to take forward residential development projects.  

Medium and Long-term Land Supply

108. The Government will make vigorous efforts to take forward new development and extension projects in the New Territories and Lantau, with a view to supplying housing units and promoting the local economy.  We are planning the future development of Lantau and New Territories North, and considering projects such as reclamation on an appropriate scale outside Victoria Harbour, development of artificial islands in the central waters, as well as the use of rock cavern and underground space.  

New Development Areas and Extension of New Towns

109. The Government is proceeding in full steam to take forward projects relating to the development of new development areas (NDAs) and the extension of new towns.  It is estimated that Kwu Tung North and Fanling North NDAs, Tung Chung New Town Extension, Hung Shui Kiu NDA and Yuen Long South Development can provide over 197 000 units for occupation starting seven years from now.  

Tseung Kwan O Area 137

110. The Government will carry out new planning for the development of the 80 hectares of land at Tseung Kwan O Area 137 and examine the feasibility of using the site for residential, commercial and other development purposes.  

Rock Cavern Development, Underground Space Development and Reclamation outside Victoria Harbour

111. The Government is about to complete the territory-wide Cavern Master Plan.  Feasibility studies on the relocation of three sewage treatment works and service reservoirs to caverns are expected to be completed early next year.  

112. The Government will consult the public on the formulation of preliminary underground master plans for four urban areas and identify priority projects.  

113. The Government will commence two studies on the development of artificial islands in the central waters and the Sunny Bay reclamation respectively as soon as possible.  We will also explore the feasibility of reclamation in Lung Kwu Tan to build up the land reserve.  


114. The Lantau Development Advisory Committee has submitted a report to me, proposing the development of an economic and housing corridor at Northshore Lantau.  The population will be concentrated in Tung Chung and Siu Ho Wan.  Development for commercial, tourism and recreational purposes will be located at the airport, the boundary crossing facilities island of Hong Kong-Zhuhai-Macao Bridge, Tung Chung East and the Sunny Bay reclamation area.  Northeast Lantau will be for leisure and entertainment uses.  Another proposal is to examine the possibility of further developing the East Lantau Metropolis by constructing an artificial island near Kau Yi Chau.  In the long run, the Metropolis will become the third core business district and a community with a population of 400 000 to 700 000.  It will link Hong Kong Island, Lantau and the New Territories West.  Priority will be given to building transport infrastructure and a low-carbon smart city in developing the above.  

115. Most places in Lantau are rich in natural and cultural resources, but lack facilities.  Both the Lantau Development Advisory Committee and the Government consider that apart from stepping up conservation efforts, short and medium-term improvement measures should be put in place to facilitate public enjoyment of Lantau, especially central and south Lantau.  

116. The Government will conduct public consultation in the first half of this year before promulgating a blueprint for Lantau development, which will set out the indicative implementation timetable for related projects.  The Government will set up a dedicated Lantau Development Office as soon as possible to undertake these tasks.

(To be continued)

Ends/Wednesday, January 13, 2016
Issued at HKT 12:03


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