Hong Kong government to sell only 2 plots of residential land in second quarter of financial year amid weak market sentiment

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The parcels in Kai Tak and Tung Chung, providing 1,739 flats in total, will be put up for tender between July and September, says Secretary for Development

The total supply for the first half of the financial year – including private developments – should support some 8,280 flats, which is about 65 per cent of the annual target

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View of Kai Tak Area 2A site 2 and site 3, which form part of the government’s land sale programme for July to September 2023. Photo: Edmond So

Lam Ka-sing

Published: 7:43pm, 29 Jun 2023Updated: 9:00pm, 29 Jun 2023

Hong Kong’s government has defied market expectations by announcing it will sell only two plots of residential land in the second quarter of the financial year – about half the number forecast by some analysts.

The parcels in Kai Tak, the site of Hong Kong’s former international airport, and Tung Chung on Lantau Island, which will provide 1,739 flats in total, will be put up for tender between July and September, Secretary for Development Bernadette Linn Hon-ho said on Thursday.

The provision is smaller than the 2,400 flats from two sites offered in the three months to June, which are in Kennedy Town and Tsuen Wan.

However, the total supply for the first half of the financial year – including private developments – is expected to support some 8,280 flats, which is about 65 per cent of the government’s annual target for housing, Linn said.

Analysts suggested the surprisingly small offering of land in the second quarter may reflect the gloomy market conditions, though the government denied this was a factor in its decision.

Area 106B, Tung Chung, New Territories. Photo: Handout

A rapid succession of interest rate increases has cast a long shadow over a growing property oversupply that is being exacerbated by newly built flats coming onto the market.