On 28th February, Hong Kong Financial Secretary Paul Chan Mo-po announced the 2018-2019 budget. Mr. Chan stated that he was cautiously optimistic about Hong Kong’s economic prospects. Although he admitted that property prices had soared beyond the affordability of ordinary citizens over the past years, he believed that the key factors underpinning soaring property prices over the past few years were gradually undergoing fundamental changes. Spacious has highlighted five key points of the new budget as they relate to the Hong Kong property market.
- More residential flats in the coming five years
The private sector will produce on average about 20,800 residential units annually from 2018 to 2022, amounting to an increase of 50 percent over the annual average in the past five years.
In the near to medium term, 380,000 residential flats will be provided by rezoning sites, increasing development density as appropriate, and taking forward projects at the Kai Tak Development Area and Anderson Road Quarry, railway property development projects and urban renewal projects. In addition, over the longer term, a number of projects in new development areas and railway property development projects will provide about 220,000 residential units.
2. 25,500 units of residential flats expected in the year 2018-2019
The 2018-19 Land Sale Programme comprises a total of 27 residential sites capable of providing about 15,200 residential units. Together with railway property development projects, the Urban Renewal Authority’s projects and private development/redevelopment projects, the potential land supply for the whole year is expected to have a capacity to produce about 25,500 units.
3. More industrial/commercial space in the next few years
1.1 million square metres of floor area as industrial/commercial land is anticipated by reprovisioning the existing government facilities in the two action areas in Kwun Tong and Kowloon Bay, as well as by selling a number of commercial sites located at the Kai Tak Development Area, above the terminus of the Hong Kong Section of the XRL, at the new Central Harbourfront, Caroline Hill Road, Queensway Plaza and Sai Yee Street, etc.
4. 530,000 square metres floor area of industrial/commercial land in 2018-2019
Four commercial/hotel sites will be included in the 2018-19 Land Sale Programme, capable of providing about 530,000 square metres of floor area.
5. The ultra-low interest rate of the past few years will no longer persist
As the US interest rate normalisation process continues, interest rate hikes are likely to take place. Homebuyers are therefore suggested to consider their ability to repay before purchasing a property.