Compulsory sale applications remain high in 2020.
The lack of land supply is worsening in Hong Kong, according to real estate and investment management firm JLL.
JLL said that since the government reduced the proportion of private housing supply in its 10-year housing supply target to 30% from 40% in December 2018, the number of residential public land sales had decreased significantly.
There were "only 10 residential sites sold via government tender in 2020, compared to 11 sites each in 2018 and 2019, which is even lower than the 20 to 30 residential sites sold each year between 2014 and 2017,” said Norry Lee, senior director of projects strategy and consultancy department of JLL Hong.
Meanwhile, appplications for an order for compulsory sale under Hong Kong's Compulsory Sale for Redevelopment Land Ordinance remain at a high level. This is despite a slight dip as compulsory sale applications decreased from 37 in 2019 to 35 in 2020.
According to JLL, this is the third consecutive year that the number of applications remain high, with an average of 37 applications per year between 2018 and 2020, since the Lands Tribunal received an average of 17 applications between 2013 and 2017.
"Although the process in assembling sites for redevelopment is lengthy and complicated, we expect the number of applications for compulsory sales to remain as government residential land sales remain constrained and developers have strong interest in developing residential projects," Lee said.
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