Concrete Analysis | Far more flats are needed than are planned in the Hong Kong government’s long-term housing strategy
- The soaring real estate prices and unstable housing supply of the past decade is the result of inadequate planning for long-term supply by the government
- The potential land supply for the whole of 2020 is expected to provide capacity about 15,700 units only
According to a Hong Kong government report last year on long-term housing strategy, the target for total housing supply in the next 10 years has been adjusted down from 450,000 to 430,000 units. The number of private houses within this will fall from 135,000 to 129,000 units.
In other words, the supply of private residential units in the coming decade will be roughly 13,000 per year.
This is undoubtedly bad news for many Hongkongers, who have set home ownership as one of their lifetime goals.
Based on statistics provided by the Transport and Housing Bureau, from 2009 to 2018 the annual number of completed private residential flats was just 13,000, while the latest figures from the Rating and Valuation Department show this figure fell sharply in the last year.
Only 12,925 private flats were completed in the first 11 months of 2019, down 18 per cent from 2018. And that is not to mention the fact around 20,000 to 30,000 flats were completed each year in the 1990s.
It is estimated that there is a shortfall of half a million residential units currently because of the city’s prolonged failure to supply adequate land to meet housing demand.
On February 26, as part of the 2020 budget Hong Kong’s financial secretary announced a land sale programme comprising 15 residential sites, capable of providing about 7,500 residential units. Together with railway property development projects and private development and redevelopment projects, the potential land supply for the whole year is expected to have the capacity of providing about 15,700 units only.
