HONG KONG, Oct 10 (Reuters) - Hong Kong’s leader promised on Wednesday to ease the city’s chronic housing shortage by boosting the supply of land through reclamation and redevelopment projects and allocate more space for public housing.
Soaring real estate prices have given Hong Kong a dubious ranking as the city with the greatest bubble risk, according to the latest UBS Global Real Estate Bubble Index, and angered many of its residents.
While private home prices have started to cool, falling for the first time in 29 months in August, a 60 square metre (646 sq ft) flat on Hong Kong Island that month still cost an average of HK$10.8 million ($1.38 million).
Chief Executive Carrie Lam, in her annual policy address on Wednesday, said addressing the land shortage was an urgent priority for her government.
“Improvement of livelihood and development of the economy and transport infrastructure of our society hinge on land resources, without which all strategies or plans will end up in empty talk,” Lam said.
She said a reclamation program would develop artificial islands with a total area of about 1,700 hectares in the next 20 to 30 years. The aim is to provide up to 400,000 residential units and accommodate up to 1.1 million people.
The city will speed up studies on releasing brownfield and other suitable sites, including civil servants’ cooperative buildings, for housing, she said.
It also planned to introduce private land redevelopment schemes with developers and reuse industrial buildings for transitional housing.
The city aims to increase the number of affordable flats by allocating more new land to public housing, including raising the ratio of public housing on newly developed land to 70 percent from 60 percent.
Most of the measures highlighted in Lam’s speech were already known, analysts said. Hong Kong set up a task force on land supply in 2017 and began a five-month consultation process this year.
“The land and housing policies did not give any big surprise,” said Thomas Lam, executive director at property consultancy firm Knight Frank.
Lam said it would take years for many of the government’s measures to increase the land supply.
Low interest rates, limited housing supply and large flows of capital from mainland Chinese buyers have pushed housing prices up 165 percent over a decade, prompting repeated warnings from authorities about the risks of an asset bubble. (Reporting by Clare Jim; Editing by Darren Schuettler)