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Property News Weekly Digest
2018/10/20
〈China Daily, October 20, 2018〉The housing and land supply issue has been the top public concern in recent years. It is quite surprising that a government proposal to create an artificial island which can massively increase Hong Kong’s land supply led to a protest on Sunday. The opposing voice seems to be not good news to Hong Kong. It reminds us of the importance of consensus.

Several thousand people expressed their opposition against the reclamation plan on Sunday. Understandably, the numbers cited in the Lantau Tomorrow Vision plan, e.g., 1,700 hectares, HK$500 billion and 20 years, are too big to the public. In common sense, it is hard to imagine and analyze the effectiveness of such a massive and long-term project.

However, there are three points to note. Firstly, creating new land supply is an urgent issue and should not be delayed any longer. Secondly, land creation is a massive project and needs public support. Thirdly, the reality is “no consensus, no new land supply”. Hence, it is time to transform our diverged voices into a collective consensus. The consensus should not be on the details but on three fundamental principles on future development.

The primary principle is that housing is the priority. As a highly developed city, the current housing situation is not acceptable to the public. According to the Housing Authority, at end-June 2018, there were about 150,600 general applications for public rental housing and the average waiting time for general applicants was 5.3 years. We should agree to provide a safe and stable shelter for the needy.

Moreover, the housing costs, including rent and price, should be managed at an affordable level. That implies the amount of public housing should be significantly increased and the property speculation should be restrained. Hong Kong people deserve more living space. In 2016, the median per capita floor area of accommodation was just about 161 square feet. There should be a consensus that this situation will not last for future decades. That means even as our population stops to grow, the demand for land will continue to increase.

〈Asian Post, October 19, 2018〉Government will seek to secure financing from lawmakers in first or second quarter of 2019 for controversial 'Lantau Tomorrow Vision' study

Hong Kong's development minister yesterday said officials would next year ask the legislature to fund studies into building artificial islands east of Lantau over the next 30 years.

Michael Wong Wai-lu said the research would focus on the first stage of the plan - the reclamation of 1,000 hectares next to the small outlying island of Kau Yi Chau.

"But we will also put together basic data on the other 700 hectares, off Hei Ling Chau, to make full use of public money," Wong said on a morning radio show.

The Development Bureau would look to secure the cash in the first or second quarter of 2019, he said.

The plan to push ahead with the ambitious project came after thousands turned out at a protest against the proposal on Sunday, voicing concerns about cost and environmental damage.

Chief Executive Carrie Lam Cheng Yuet-ngor last week announced in her annual policy address that the "Lantau Tomorrow Vision" could house up to1.1 million people. But she took flak for proposing the reclamation of 1,700 hectares when a previous plan had floated only 1,000 hectares.

Last year, the Task Force on Land Supply was appointed by the government to study options for freeing up land in Hong Kong. It has been conducting a public consultation in which the reclamation of 1,000 hectares was one of 18 options.

〈Asian Post, October 19, 2018〉A wave of mainland firms are hunting for old buildings in Hong Kong's urban areas in a bid to acquire cheap land for redevelopment in the world's most expensive property market.

As of October 4, there were 25 applications submitted by developers for compulsory en-bloc sale, according to data from the Lands Tribunal. The figure is 60 per cent more than the 11 cases in 2016 and 47 per cent higher than the 17 cases filed in 2015.

"The surge is partly driven by the entrance of mainland developers," said Alnwick Chan, executive director and head of valuation and professional services at Knight Frank.

The trigger threshold in the Land (Compulsory Sale for Redevelopment) Ordinance was relaxed in April 2010 to allow developers to force the sale of remaining flats in a building older than 50 years once they had acquired 80 per cent of the units. This was down from the previous 90 per cent threshold.

As home prices soften, mainland developers have become more active in acquiring old buildings.

Agile Property, one of the most aggressive in securing redevelopment opportunities, paid HK$800 million for 30 flats, or an 80 per cent stake, at the 44-unit Dragon Court on 6 Eastbourne Road in Beacon Hill, Kowloon Tong.

The developer also bought five flats at nearby Hamburg Villa, which comprises 33 units, on 8-10 Eastbourne Road for HK$73 million.

It could combine the two sites and redevelop the two ageing residential blocks into a luxury housing project.

In a similar move, Country Garden paid HK$610 million for the whole building on 142-154 Carpenter Road in Kowloon City.

Meanwhile, China Aoyuan Property Group bought five flats at the 51-year-old Yin Yee Mansion in Mid-Levels West for HK$131 million in March.

〈The Standard, October 18, 2018〉The exchange of barbs between Chief Executive Carrie Lam Cheng Yuet-ngor and Wheelock vice-chairman Stewart Leung Chi-kin over an extremely desirable prime residential site on The Peak was illuminating.

It wasn't the first time the government withdrew a plot from sale, saying bids failed to meet expectations. But no past incident had fired up tempers like the current case.

Clearly irritated, Leung - who also chairs the Real Estate Developers Association's executive committee - complained that it was unreasonable for the government to withdraw the site, and said he didn't know what constituted the market price if the developers' bids didn't reflect market valuations.

In a tit-for-tat, Lam hit back, denying the administration had set too high a price, and asserted developers should know government surveyors set the reserve price the morning the tender closed - not two months before, as wrongly claimed.

Perhaps, the best way to settle the dispute would be to make public the various bids so that we will be able to judge whether the government has set a price unrealistically high, or if the developers made low-ball bids hoping to secure the site at a knocked-down price that ultimately forced the withdrawal.

It may be wise of Financial Secretary Paul Chan Mo-po to consider this seriously. Otherwise, similar quarrels can break out each time a site - especially a particularly attractive one - is pulled back from the market.

〈China Daily, October 17, 2018〉Chief Executive Carrie Lam Cheng Yuet-ngor said on Tuesday that research on a longterm land reclamation plan should go forward “as early as possible” to help relieve the city’s acute land shortage.

The ambitious “Lantau Tomorrow Vision” proposed in Lam’s second Policy Address last week involves land reclamation near Lantau Island. It aims to provide 1,700 hectares of land, able to house up to 1.1 million people and to create 340,000 jobs over the next two to three decades.

Speaking to reporters before the weekly Executive Council meeting, Lam said the government should act promptly to address the city’s land scarcity, instead of waiting until there is no available land left.

“Hong Kong needs a more steady supply of land, not only to meet our immediate needs but to meet the future needs, in terms of housing, economic development, leisure and all the other purposes,” Lam said.

In the initial phase of the long-term plan, Lam said the Development Bureau will start researching a 1,000-hectare reclamation project near Kau Yi Chau. Other reclamation sites include waters near Hei Ling Chau and off the coast of Tuen Mun.

Reiterating that it’s impossible to estimate the cost since no research has been done, Lam emphasized that the Legislative Council will examine a future budget for the plan before granting a fund. This is to ensure the government could afford the costs.