Property Heir Urges Hong Kong to Improve Land Policy
(Bloomberg) -- A Hong Kong property heir criticized the local government’s land policies and suggested an overhaul as housing problems become the priority for leaders in the world’s least affordable residential market.
“Many procedures and systems are obsolete and time consuming,” Adam Kwok, an executive director and a third-generation heir at the city’s biggest developer Sun Hung Kai Properties Ltd., said on Thursday. “There isn’t a mentality to do as much as possible, which leads us to today’s situation.”
Kwok was speaking at an forum hosted by a pro-government party, and was joined by lawmakers and scholars in calling for urgent changes to land policies to address a housing shortage.
Hong Kong’s home prices are expected to break a record this year, even with some residents leaving as China tightens controls over the territory. Demand for homes continues to outweigh supply in a city where space is precious and the government gradually sells land through auctions to developers.
Attending the event as a representative of the Real Estate Developers Association of Hong Kong, Kwok said the government didn’t take full advantage of available land resources. He suggested it explore the possibility of developing buffer zones along wetlands and green belt areas -- natural spaces designated to prevent encroachment by urban development.
He also urged the government not to stop private housing projects from proceeding first in a new development area simply because a planned road or other infrastructure has yet to be completed.
It’s rare for a property executive to publicly call for broad changes to government policy in a city where developers have often been blamed for soaring home prices. Major real estate companies including Sun Hung Kai hold around 100 million square feet (9.3 million square meters) of farmland in the New Territories -- a sign of land hoarding according to critics.
Even so, Kwok said large portions of the area are still either owned by the government or are ancestral lands of the indigenous people.
Kwok’s remarks came just hours after Chief Executive Carrie Lam defended her administration’s efforts in solving the housing crisis in a session with lawmakers. Xia Baolong, China’s top official to Hong Kong, has said he expects the city’s housing problems will be “greatly improved” by 2049 as the economy and society prosper under the national security law, according to a transcript published by the Hong Kong and Macau Affairs Office.
The proposals put forward by Lam, including speeding up infrastructure construction, are good recommendations, Kwok said. He also praised the creation of a facilitation office by the government to accelerate the approval process.
“I recognize the administration’s determination and I see that some procedures are being sped up,” said Kwok. But the government still needs an appropriate team and policies to solve the issues, he added.
The supply of new residential units in Hong Kong has continued to decline in recent years. The number of private homes that can be produced from available land plots plunged from a peak of 25,500 three years ago to 13,020 this year, according to think tank Our Hong Kong Foundation.
That’s putting pressure on prices. JPMorgan Chase & Co. expects home values to rise 10% in 2021.
A constantly heated housing market is a political burden in Hong Kong, where only 52% of residents own their apartments. Beijing sees the housing crisis in the former British colony to be the origin of social discontent fueling mass protests two years ago.
©2021 Bloomberg L.P.