Chief Executive John Lee on Friday said Hong Kong has enough land alloted for housing that should prevent any acute shortages over the next few decades, and also help keep prices in check. He was responding to a caller on an RTHK phone-in programme asking whether the government’s reserve prices for land sales effectively keeps prices largely unaffordable. Lee stressed that land is a precious asset that belongs to the people and should be valued accordingly. He also noted that he had in his Policy Address this week introduced measures to help prospective homebuyers by increasing how much they can borrow from banks for mortgages. While noting that there is “still more” the government needs to do, he stressed that the government has accelerated its pace in securing land for housing, and the 7,000 hectares of land now available for residential use over the next three decades means there shouldn’t be any shortage. “If there's more land supply, then the price of land will be suitably set according to [the actual] market situation. The big shortage that appeared previously should not happen that abruptly now,” Lee said. The Chief Executive also said developers will have to keep prices tethered to reality as everyone knows there’s adequate supply. “Everybody knows how much land and when it will be available, and the price set by the developers will have to be in accordance with the actual situation and then all the calculations can be done by even the normal citizen,” he said. Lee also played down the possibility that new proposed restrictions on subdivided flats could create a shortage and drive prices up, as the government is set to propose new legislation requiring all flats to be at least 86 square feet in size, have windows and an individual toilet. He said there are clear financial incentives for people to supple small, affordable units for rent, as research shows they would earn several times more from renting out subdivided units compared to one single apartment. “There is a strong business case for the market to develop,” he said. “Once the rules are clear, then I think it’s only natural for those who have been benefiting or who see this as a beneficial business will then develop it.” He said there should be ample time for this new supply to emerge, since the entire process of legislation and registration, along with a grace period, means the new rules would only fully be in place in “a few years.” “I think the market will ensure that the right rent is set,” Lee said. The CE also repeated his call for various business sectors here to reform and evolve to adapt to the changing conditions. “The economy isn't doing badly because we are still strongly in the belief that the overall economy will grow between 2.5 to 3.5 percent,” he said. “That means the macro economy is positive, but micro-economy, particularly for some sectors, they may have to think of new ways of doing things as to make themselves attractive. While the Chief Executive spent most of the hour-long phone-in programme explaining his new policies, he got some new ideas from callers as well, including from Vic – who asked John Lee if he could do anything to pave the way for motorcyclists to ride their bikes directly across the border. The questioned appeared to stir up the CE’s passion as a car enthusiast. “Obviously, I enjoy driving as well,” Lee responded. “So I do look forward to the time when I do retire, then I will personally drive to different parts of the world, in particularly the GBA and other mainland cities.” “So I do understand why you want to have your own bike and drive up to the mainland – it's easy and also China being a big country you really have a lot to see, really a lot to enjoy. I can't make my promise but definitely you have made a new point which I find attractive”, he said.
