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Budget Speech by the Financial Secretary (8)
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Land and Housing Supply

Northern Metropolis

209. The NM plays a pivotal role in driving Hong Kong's social and economic development and enhancing our competitiveness. The Government is pressing ahead with the development of the NM which would provide ample room for the development of housing, I&T sector as well as other industries.

Land Development and Infrastructure

210. The first batch of site formation works for the I&T land in San Tin Technopole and the university land in Hung Shui Kiu will be completed within this year. We will seek funding approval from the LegCo in 2026-27 for kickstarting projects such as the site formation and engineering infrastructure works for Ngau Tam Mei New Development Area and Stage 2 of San Tin Technopole Phase 1 Development, as well as construction of the government joint-user complex in Kwu Tung North.

211. The Hung Shui Kiu Industry Park Company Limited was established by the Government last month. It will develop and operate around 23-hectare industry land in Hung Shui Kiu through direct participation and public private partnership with a view to bringing in more industries in an accelerated manner. We plan to seek funding approval from the LegCo for injecting an initial capital of $10 billion to support its initial operation and development needs, thereby facilitating its operation to commence by the middle of this year.

Multi-pronged Development Approach

212. We are accelerating the development of the NM with an innovative mindset. For instance, the large-scale land disposal approach is adopted to expedite the granting of land in new development areas, and tenders are being invited for the first pilot area in Hung Shui Kiu/Ha Tsuen. We have also introduced flexible land premium payment arrangements, such as allowing the offsetting of land premium by surrendering land in the NM to be resumed by the Government as well as staged payment of land premium. Together with measures such as adoption of the "pay for what you build" approach for assessing premium based on the actual gross floor area and the intended use, and provision of longer-term government tenancies, these arrangements can alleviate the cash flow pressure on enterprises and the uncertainties they face when pursuing land development.

213. We will continue making appropriate land disposal and financing arrangements for the industry sites and major development projects in the NM, and stepping up efforts to attract enterprises and investment, with a view to encouraging high-quality enterprises to establish in the NM.

Dedicated Legislation along with Administrative Measures

214. The Government will shortly conduct public consultation on the proposal to introduce a dedicated legislation to accelerate the development of the NM. Our aim is to introduce a bill in the middle of this year. In addition, the NM Project Supervision Office will expedite large-scale private development projects in the NM by strengthening co-ordination and imposing time limits on the approval process. These administrative arrangements are also applicable to development projects outside the NM.

Land Supply

215. We will make available land for the production of about 98 000 private housing units in the next five years. The Land Sale Programme for the coming year will include nine residential sites. Together with railway property development projects, projects undertaken by the Urban Renewal Authority (URA), as well as private development and redevelopment initiatives, the potential land supply for the whole year is expected to have a capacity for providing around some 22 000 units. I would like to emphasise that, for the steady development of the market, the specific land sale arrangements will be announced on a quarterly basis after careful consideration of market conditions and other relevant circumstances.

216. In view of the vacancy rate in the non-residential property market, the supply and demand, the Government will not put up general commercial sites for sale in the coming year. In addition, the HKIC will collaborate with regional and international long-term capital to channel funds into high-quality commercial property projects that align with Hong Kong's industrial positioning and match them with enterprises from target industries.

217. Separately, the Development Bureau (DEVB) is inviting the market to submit expressions of interest for post-secondary student hostel development on three sites. Subject to market response, the relevant sites may be put up for tender.

Housing Supply

218. Taking into account Light Public Housing (LPH), the total public housing production in Hong Kong will be around 196 000 units in the coming five years, an increase of more than 80 per cent compared to the five-year period since the current-term Government took office.

219. Around 9 500 LPH units were built and commissioned last year. We are steadily moving towards the target of completing around 30 000 LPH units by 2027-28.

220. The Basic Housing Unit regulatory regime will come into effect in March with a 48-month transitional arrangement.

221. On private housing supply, we estimate that the completion of private residential units will average at around 17 000 units annually over a five-year period from this year, representing a decrease of about eight per cent over the annual average of the past five years. The potential supply of first-hand private residential units for the next three to four years will be around 104 000 units.
 
Infrastructure Development

Transport Infrastructure

222. The Government has recently announced the Transport Strategy Blueprint, outlining strategies and specific recommendations for the sustainable development of the transport system in Hong Kong. Guided by a public transport-oriented principle, the Blueprint aims to enhance cross-boundary transport infrastructure, facilitate the movement of people and goods within the GBA and drive smart transformation to provide greater convenience for the public and tourists.

223. We are pressing ahead with a series of railway, major road, and Smart and Green Mass Transit System projects to form an "Eight Vertical and Eight Horizontal" layout. Among them, the Central Kowloon Bypass (Yau Ma Tei Section) is now open to traffic, while the remaining Kowloon Bay Section is expected to be completed by the end of this year. By then, it will only take about 12 minutes to travel between Yau Ma Tei and Tseung Kwan O. As for railways, projects including Kwu Tung Station, Tung Chung Line Extension, Hung Shui Kiu Station, Tuen Mun South Extension and Oyster Bay Station, etc. will be completed progressively from next year onwards.

224. We are taking forward the Northern Link Main Line and Spur Line at full steam for commissioning simultaneously by 2034 or earlier. We are also actively taking forward the Hong Kong Shenzhen Western Rail Link (Hung Shui Kiu-Qianhai) project, with the target of inviting tender for its detailed design and construction next year and commissioning in 2035.

225. Besides, tender for the Smart and Green Mass Transit System project in the Hung Shui Kiu/Ha Tsuen New Development Area is expected to be invited this year. We are also pressing ahead with the investigation study for the NM Highway, with priority given to the San Tin Section. The target is to invite tender for the main construction works next year, aiming for commissioning by 2036 or earlier.

Professional Development of Construction Industry

Application of Robots

226. We have required public works projects to adopt construction robots in suitable processes. To this end, the Construction Industry Council will also provide relevant training to promote the effective use of robots in the industry.

Promote Application of Innovation and Technology

227. The Construction Innovation and Technology Fund serves to promote the industry-wide application of I&T, thereby enhancing productivity and site safety as well as reducing construction costs. We will inject $1 billion into the fund to continue supporting industry development.

New Engineering Contract Form and Smart Site Safety System

228. We are actively exploring with the Qianhai Authority for the pilot implementation of Hong Kong's New Engineering Contract form and Smart Site Safety System in Qianhai to facilitate the alignment of the Mainland's engineering contract and management system with Hong Kong and international standards.

Align Construction Standards

229. We will make reference to GB and overseas standards to further enhance local construction standards and specifications. Besides, we will leverage Hong Kong's unique strengths as a global city and its experience to co-establish the GBA Construction Standards and help GB gain access to the global market.

Building Technology Research Institute

230. To promote applied R&D and strengthen control over construction costs, we have earmarked $100 million for commissioning the Building Technology Research Institute to conduct various studies. These include reviewing construction standards and exploring AI applications.

Reducing Construction Costs

231. Through enhancing the project procurement model and streamlining the approval process, DEVB is implementing various measures to reduce construction costs and enhance effectiveness. For example, cost savings of about 10 per cent to 20 per cent can be achieved through direct procurement of Modular Integrated Construction (MiC) modules in LPH projects as well as electrical and mechanical equipment for a sewage treatment plant project.

232. Utilising its self-developed "Building Information Modelling (BIM)-enabled Systematic Approach to Foundation Design", the Housing Department achieves construction cost savings of about $1 million per building on average. In addition, the second-generation MiC approach, together with locally developed innovative coupling technology, are being adopted to expedite public housing projects and enhance cost-effectiveness.

(To be continued.)
 
Ends/Wednesday, February 25, 2026
Issued at HKT 12:40
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