Tycoon Lee Shau-kee threw down the gauntlet to the government yesterday, saying he should be allowed to build 300-square-foot homes on vast agricultural lands held by his firm without having to paying any extra land premium.
The feisty billionaire and chairman of Henderson Land Development is proposing selling the units at HK$1 million each to ease Hong Kong's growing housing shortage.
Lee said social conflicts would ease if more people were able to buy homes.
Henderson is the biggest holder of agricultural land among local developers, with most of the 42.4 million sq ft over which it holds sway as of June located mostly in the northeast New Territories.
Negotiations over the extra land premium - what Henderson has to pay authorities to convert its farmland to residential or commercial use has dragged on for years.
For some sites, talks have apparently continued for decades, and last year other developers urged the government to speed up such negotiations.
The proposed HK$1 million price tag or HK$3,333 per square feet, is considerably modest compared with flats at Henderson's latest scheme, High Place in Kowloon City. There, a unit with a 182 sq ft saleable area, is selling for as much as HK$4.32 million, or HK$23,736 psf.
Michael Choi Ngai-min, a member of the government's long-term housing strategy steering committee, said Lee's proposal merits a serious consideration, but that the administration has to ensure the developer does not reap extra benefit from such projects.
Alnwick Chan Chi-hing, head of valuation and professional services at Knight Frank, said assuming a construction cost of HK$2,000 psf and the expenses acquiring the land, Henderson would reap very modest profits.
"But these homes can be built alongside private buildings, where other facilities such as a shopping mall can bring extra benefits," Chan said.
But Lawrence Poon Wing-cheung, senior lecturer at City University's building science and technology division, said the HK$1 million price tag looked promising as most of the sites were acquired at about HK$100 psf many years back.
Poon said if the low-cost home project is approved, the government should require homeowners to pay back the premium when they resell their apartments.
As for the general picture of the sector, Lee believes home prices will remain stable, following the imposition of an extra stamp duty to curb housing demand.
"They [ the measures] are focused on eliminating speculation, which is good for society ... some speculators have really pushed up home prices to unreasonable levels, and this is really outrageous."
Lee expects home prices to rise in a stable manner - by 5-10 percent annually for the next two years.
Lee said he hopes Chief Executive Leung Chun-ying can do more. "Anybody can do the job well as Hong Kong is a place where golden eggs are laid."
But he added, "I'm not saying I don't support him [Leung]."
Leung is set to deliver his inaugural policy address next Wednesday.
Lee, a frequent stock market player who is also dubbed Asia's Warren Buffet, forecast the Hang Seng Index would rise to 26,000 by the middle of this year and 28,000 by the year-end.