Hong Kong to Assuage Land Woes

"Hong Kong to Assuage Land Woes | AboutHK.Com - More Information About HK"

JONATHAN CHENG Hong Kong's leader said the government is looking at ways to boost land supply for residential development in this space-strapped city, fearing an emerging property bubble amid a run-up in home values of about 30% this year and record-high luxury prices. Also Wednesday, blue-chip property developer Henderson Land Development Co. claimed to have set several records in Asia with the sale of a 6,158-square-foot condominium at its 39 Conduit Road development for US$56.6 million. The buyer, whom Henderson identified as mainland Chinese, paid US$9,200 per square foot -- a record in Asia for residential property, the developer said. Demand from mainland China has buoyed prices of Hong Kong's most expensive homes in recent months. In an annual policy speech before lawmakers on Wednesday, Chief Executive Donald Tsang said officials would closely monitor the property market and fine-tune land-supply arrangements "with a view to quickening the pace of bringing readily available residential sites to the market." Mr. Tsang's comments were aimed at assuaging growing concerns over the impact of tight land supply in Hong Kong, one of the most densely populated cities in the world. In recent years, the government maintained a land policy that had the effect of keeping prices firm, by scrapping a longtime system of conducting regular land auctions. Mr. Tsang also acknowledged that the recent drop-off in construction activity had contributed to a spate of record-breaking transactions in the luxury residential market. "Certain transactions this year have caused concern about the supply of flats, difficulty in purchasing a home and the possibility of a property bubble," he said. Mr. Tsang's words came after weeks of mounting pressure from Hong Kong's powerful property developers to loosen land supply. Last week, Henry Cheng, chief executive of local blue-chip property developer New World Development Co., said he had met with officials to warn of a severe "supply-demand imbalance" that would lead to "unhealthy market development." The company said Wednesday that it wanted "concrete plans" from the government on its plans to loosen land supply. Mr. Tsang said a government redevelopment body and the city's metro operator could add to the supply of homes. He also announced plans that could lead to redevelopment or conversion of more than 1,000 industrial buildings. Write to Jonathan Cheng at jonathan.cheng@wsj.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it Printed in The Wall Street Journal, page A9