Land supply shortage to persist up to three years: JLL

The 2021 New Land Sale Programme shows difficulties in generating new supply.

The lack of supply of land for mass residential development will continue within the next two to three years, real estate services firm JLL said, after the government reported the 2021/22 Land Sale Programme.

The programme comprises 15 residential sites that will provide 6,000 units and three commercial sites or 478,000 square metres of floor area.

“The new land sale programme reflects the government’s difficulties to generate new land supply. Most of the residential sites on the programme are for low density development. The land supply for mass residential will rely on the MTR projects,” said Dorothy Chow, senior director of valuation advisory services at JLL.

Chow added that aside from the three commercial sites for the next financial year, there are two other sites in Central and Causeway Bay’s Caroline Hill Road which are either up or will be up for tender.

She said, however, that the commercial site in Tung Chung’s area 57 was withdrawn last October, signaling a lack of interest among developers.

“Under the current situation where tourism has been hit by the pandemic, we expect developers to focus their resources in the bidding for the commercial sites in Central and Causeway Bay,” Chow said. “That said, these two commercial sites have a higher chance of being withdrawn from tender.”

Apart from the 15 residential sites, Development Secretary Michael Wong said some 4,050 units are expected from the property development projects of the MTR Corporation Limited and 3,150 more from six projects of the Urban Renewal Authority (URA).

Wong said this will bring potential private housing land supply in 2021/22 to a total of 16,500, but noted the actual supply will depend on market conditions, readiness for sale, progress of railway property developments and URA projects among other factors.

Moreover, the government plans to tender around 980 flats in two residential sites in Kwu Tung and Fanling between April to June 2021.

"The government will follow the established practice to announce in advance the quarterly land sale programme in order to provide transparency and certainty to the market. We may put up additional sites for sale in the quarters depending on the situation, so as to flexibly respond to changing market conditions," Wong said in line with the government’s commitment to provide steady and sustained land supply.