The administration's focus on education and IT is drawing attention away from the more pressing housing issue.
The administration’s fiscal framework laid out in Finance Secretary Paul Chan’s budget 2018 address lacks the necessary focus to address Hong Kong’s perennial housing woes as the government is increasingly unable to meet its housing supply targets, according to research firm Natixis.
Despite the identification of over 300,000 sites with housing development potential and maintaining the target of 100,000 public housing units in the next five years, Natixis notes that the government has actually fallen short on delivering the promised 75,000 units of public housing last term after only building 64,500 units.
“This same plan could mean new residential unit supply will finally exceed the increase in the number of households needing housing, but the actual private unit completion has always been below forecast so it is hard to find a reason for a better supply pattern this time. For private units, the actual unit completion is always much lower than the government forecast,” Natixis said.
The estimated private housing land supply capacity of 25,510 units is also the lowest in at least six years as supply has typically hovered around the 30,000 mark since 2012.
“Within the new estimated land supply this year, 77% of the potential units have not yet completed the procedure of amending the outline zoning plan. This means that the length of turning the land supply into real residential units will be even longer,” it added.
Chan’s ‘new fiscal philosophy’ charting Hong Kong’s financial course may be helping the future more than the present as the government earmarks more budget on education, technologies and financial market innovations but hardly anything on more pressing social problems like healthcare and housing.
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