HK Policy Address – Implications 20211006

Some interesting land related new measures, in summary:

a) the new Northern Metropolis is the big push to unshackle agricultural land use and to more than double the residential stock from 390k units now to up to 926k – uncertain how land resumption is to be carried out but positive for inaccessible farmland owners for sure;

b) a bundle of new rail projects (see art 26 below), mostly in the North;

c) crazy throwing of resources at ‘scitech’ related quangos – lots of coverage on Science park (land reclamationg + 88 ha. of land), Cyberport, Lok Ma Chau Loop (into San Tin Technopole, 240 ha.), land for HKU (4 ha.) and CUHK (2.4 ha.) etc etc… more administrative wastage?

d) continued low private resi supply (c. 10k units/yr for 10 yrs) – luxury prices may be even better supported. but public and related housing get big boost

e) at the same time more forceful administrative power over private property (eg. 700 ha. to be resumed in next few years, vs 20 ha. in past 5yrs; standard rates of land premium; reforming Tso/Tong land revitalisatoin – ie lower decision making thresholds; lower compulsory sale thresholds for easier URA regeneration projects),

f) more development in Tuen Mun (220ha. planning with reclamation in Lung Kwu Tan, see art. 90), and industrial revitalisation policy extended to 2024

To sum it up for investment angle:

1) north NT major boost but need to do your own work to find where the good spots are; compulsory resumption may or may not work in your favour.

2) commercial/industrial better investment than residential given deep price corrections, higher yields, and also lower relative supply (vs residential) going forward;

3) get out of low end small units housing, supply will explode; luxury will be fine (ie no more middle class, oops)

​<insert links to speech, and chinese + english speech text here>

————————extract of relevant speech bits———————–

23. The Northern Metropolis encompasses the mature new towns in Tin Shui Wai, Yuen Long and Fanling/Sheung Shui and their neighbouring rural areas, as well as …Kwu Tung North/Fanling North, Hung Shui Kiu/Ha Tsuen, Yuen Long South, San Tin/Lok Ma Chau, Man Kam To and the New Territories North New Town. …With as many as seven land-based boundary control points, the Northern Metropolis will be the most important area in Hong Kong that facilitates our development integration with Shenzhen and connection with the GBA. Under the Development Strategy, the proposed individual development projects together with the surrounding rural and conservation areas will be integrated in an innovative and organic manner conducive to upgrading the entire region to a metropolitan area. …

Transport Infrastructure-led Development

26. …The railway projects proposed in the Development Strategy include:

  1. constructing the Hong Kong-Shenzhen Western Railway linking up Hung Shui Kiu/Ha Tsuen and Qianhai of Shenzhen;
  2. extending the Northern Link, which is being planned, northwards to connect to the new Huanggang Port in Shenzhen via the Hong Kong-Shenzhen Innovation and Technology Park (HSITP) in the Lok Ma Chau Loop (the Loop);
  3. exploring the extension of the East Rail Line to Luohu, Shenzhen …provision of a new railway station for non-boundary crossing service between the existing Lo Wu Station and the Sheung Shui Station, with a view to unleashing the development potential around Lo Wu/Man Kam To and Sheung Shui North;
  4. extending the Northern Link eastwards from the Kwu Tung Station to connect with the areas of Lo Wu, Man Kam To and Heung Yuen Wai, and further southwards to Fanling via Ta Kwu Ling and Queen’s Hill; and
  5. automated people mover system from Tsim Bei Tsui to Pak Nai to promote the development of the area and Lau Fau Shan.

28. …The Development Strategy suggests that Hong Kong should leverage this opportunity to upgrade Hung Shui Kiu/Ha Tsuen and make it the New Territories North Modern Services Centre, and to build sizable landmark I&T facilities in Lau Fau Shan facing Qianhai on the other side of the Shenzhen Bay, to provide enormous job opportunities in the Northern Metropolis. …select, as far as possible, the Northern Metropolis as the location for government facilities and offices which are “non-location-bound and employment-driven”.

Increasing Land Supply for Housing

30. …Upon the full development of the entire Northern Metropolis, a total of 905 000 to 926 000 residential units, including the existing 390 000 residential units in Yuen Long District and North District, will be available to accommodate a population of about 2.5 million. The total number of jobs in the Metropolis will increase substantially from 116 000 at present to about 650 000, including 150 000 I&T-related jobs.

84. On private housing, including railway property developments, …sites for the production of about 100 000 units

89. …Over the past two years, the Government has resumed 90 hectares of land in the New Territories for development by applying the Lands Resumption Ordinance, much more than the 20 hectares of land resumed over the past five years. Looking ahead, as many as 700 hectares of land is expected to be resumed by the Government in the coming few years.

90. DEVB will conduct studies on the Lung Kwu Tan reclamation (about 220 hectares) and the re-planning of Tuen Mun West area (about 220 hectares).

93. …extending the implementation period of two existing measures for revitalising industrial buildings to October 2024, which include relaxing the plot ratio for redevelopment of old industrial buildings and exempting the waiver fees chargeable for wholesale conversion.

105. …explore ways to lower the compulsory sale thresholds under the Land (Compulsory Sale for Redevelopment) Ordinance to expedite redevelopment of aged buildings.

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