Hong Kong looks for ways to increase land supply and homes

With land either too pricey or in short supply, Hong Kong faces continuing unrest from citizens increasingly unable to own homes.

The government is responding to these problems by building some 30,000 new private homes this fiscal year and exploring alternative ways of increasing Hong Kong's land supply in the medium- to long-term. The latter includes reclaiming land and converting non-residential sites for housing use.

In the long term, the government intends to build a large land bank that will allow it to respond to fluctuating demand. This could be achieved by developing new townships in the New Territories, reclaiming land in areas outside of Victoria Harbor and repurposing agricultural land for residential and commercial use.

These efforts should also help cool-down Hong Kong’s overheated property market where prices have persistently stayed at record highs. Abundant liquidity and persistently low interest rates have led to a skyrocketing of land prices to such an extent only the rich can afford them.

As a result, about half of Hong Kong’s seven million residents live in public housing subsidized by the state.

The government's believes the fundamental issue in Hong Kong's housing sector lies in supply. It aims to provide land for about 40,000 new homes a year consisting of 20,000 private units, 15,000 rental homes and 5,000 subsidized flats.

In the last fiscal year ended March 31, the government came close to its target for private homes, supplying 19,500 units,