Tung Chung site's retender to nearly double homes as supply falls short of target

Staff reporter

The government will relaunch the tender of a site in Tung Chung to provide 745 units this quarter as it is set to reach only 63 percent of the annual private housing supply target for the fiscal year, says Secretary for Development Bernadette Linn Hon-ho.

Area 106B in Tung Chung, which covers an area of 10,648 square meters, failed to sell in September 2023 when it was first up for tender.

Back then, it was set to accommodate some 400 units with an average size of around 90 sq m, but now it will be good for more - yet smaller homes - to meet market demand, Linn said at a briefing yesterday.

The site was valued between HK$521 million and HK$800 million, or HK$1,300 to HK$2,000 per square foot.

Linn said she is "reasonably optimistic" about the retender result after the government adjusted the tender requirements to make it more attractive to developers.

The winner of the site is not required to build any government facilities nor does it need to do any site formation work, Linn said, adding that being able to build more homes on the site will also increase the return rate for developers.

MTR Corp's recent successful tender of a nearby site, relaunched after cutting the size of the plot, also gave her confidence, Linn said.

Together with an Urban Renewal Authority project offering 370 homes and two private development projects, the total private housing land supply for the quarter is projected to be 1,100 units.

That will bring the annual supply figure to around 8,340 units, accounting for just 63 percent of the target of 13,200 units set earlier.

The supply number is also set to become the lowest since Hong Kong launched the land sale program 15 years ago.

Linn said the actual housing supply exceeded the original goals in the past four fiscal years by a total of 12,000 units, which can more than offset this year's shortfall. The government will adopt a cautious and pragmatic approach, adjusting land supply strategies flexibly based on market conditions to address both housing and economic needs, she said.

The government has only collected HK$4.3 billion from land premiums since April, falling short of around HK$33 billion set in the budget for the year ending March.

Linn said she could not predict the final figures before the new budget announcement next month, but stressed that the administration cannot purely rely on land revenue to support its expenditure.

She said the land sale plan is not set in stone. It will be adjusted based on the situation.

Even if certain plots are not listed in the sale schedule, they can still be released flexibly if they are ready, Linn said, adding that the key is to give advance notice to the market.

This is why the city will not have the application list system run in parallel with the current land sale program as it might create confusion in the market and potentially conflict, which could affect the successful implementation of land sales, Linn pointed out.

Financial Secretary Paul Chan Mo-po recently made a similar comment.

The priorities of public works will be set based on urgency and importance, and major development projects, such as the Northern Metropolis and those involving housing supply, as well as key infrastructure and community facilities, will be ranked higher, she said.