As Hong Kong moves forward with its huge new Northern Metropolis development zone, analysts argue the government should take a cautious approach to land sales to help sustain the recent recovery in the residential property market.
The parcels of land – which comprise three residential sites and three enterprise and technology park sites – measure about 11 hectares and can supply more than 3,100 flats and about 280,000 square metres (3 million square feet) of industrial floor space.
“Recent land tenders already reflected a more realistic supply pace, alongside improving bidding momentum, which helps support price stability and market confidence,” said Eric Tsang, acting head of valuation and advisory services at Colliers Hong Kong.
“Against this backdrop, we believe land supply should remain measured, structured and disciplined, to maintain a steady and sustainable momentum of the residential market.”
The government should maintain its current approach to launching land tenders, which focuses on “small steps, quick strides and quarterly fine-tuning”, according to Derek Chan Hoi-chiu, head of research at Ricacorp Properties.
“While keeping the total potential supply of around 98,000 private housing units over the next five years unchanged, the government should appropriately shift its land supply focus towards the strategic layout of the Northern Metropolis,” he said.
