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Statistics on land and housing demand and supply

When formulating housing policies, we must make reference to statistics on demand and supply in an objective and scientific manner, just as people do when buying homes. Yesterday, I gave an account of the Government's latest statistics on land and housing supply and demand at a luncheon talk organised by five professional bodies.

During the talk, I found that many participants took photos of my PowerPoint slides with their mobile phones. I therefore upload to my blog today all the slides used in my talk, as well as a brief summary of the points I made, for public reference.

In tackling the problem of undersupply of housing, our basic principle is to accord priority to home ownership needs of Hong Kong people. We must completely suppress three kinds of demands: speculative, external and investment demands.

First, we must combat speculative demand. The number of short-term resale transactions accounted for 0.4 per cent of the total transactions in the last quarter. This indicates that speculators have basically left the market.

As for external demand, it has reached a very low level as it only accounted for 2.1 per cent of the total transactions in the last quarter.

Third, we must suppress investment demand. After introducing another round of demand-side management measures to stabilise the property market on November 4 last year, the number of investment transactions dropped 84 per cent in December over November in the same year. In January 2017, 95 per cent of the buyers did not own any other residential property in Hong Kong.

These statistics show, scientifically, the effectiveness of the Government's demand-side management measures on suppressing the three kinds of demands. These measures have served their intended purposes.

The production cycle of housing supply is about four to five years. The efforts that we have made since I took office in 2012 will begin to show results starting this year.

According to latest statistics, the projected supply of private residential units in the coming three to four years is 94 000, 45 per cent higher than that when I assumed office.

The private residential sites sold by the current-term Government during its five-year term of office have a capacity to produce 2.5 times more housing units when compared with that of the previous-term Government. As for commercial/business land, land sale by the current-term Government will be able to provide 2.6 times more floor area than that of the previous-term Government.

In the past four to five years, we have been working persistently on the development projects in the Northeast New Territories. The Kwu Tung North and Fanling North New Development Areas will produce 60 000 residential units for first population intake in six years. The Tung Chung New Town Extension will provide 49 400 flats for first population intake in six years, as well. And the Hung Shui Kiu New Development Area will offer 61 000 units for first population intake in seven years.

Our experience tells clearly that perseverance will pay off. Therefore, I hope that the whole community will join hands with the Government in rising to the challenges, and working with us to tackle the problem of undersupply of land and housing. We must overcome all difficulties and persist with our efforts.

February 25, 2017