The Real Estate Developers Association (REDA) suggested proposals for urban renewal with new strategy, developing high quality Northern Metropolis, and promoting development through multiple innovative implementation tools; in an engagement session with the Development Bureau on Hong Kong's First Five-Year Plan.
The REDA suggested the dual strategy of building maintenance and urban renewal to transform old districts into more livable new urban areas, to revitalize urban cityspace through promoting redevelopment, and relaxing relevant building planning regulations.
Regarding the Northern Metropolitan Area, the REDA suggested a strategic concentration of resources and a prudent, well-timed land / projects disposal program on one to two key areas, such as San Tin and Hung Shui Kiu, instead of dispersing financial and administrative capacity across numerous new development areas and infrastructure projects simultaneously.
The REDA also recommended flexible premium payment models and building covenant to attract investment; as well as reimbursing developers for site formation costs, or allowing successful bidders to sell the site, or part of it, to improve cash flow.
Banks should provide more support to commercial and industrial properties to balance the market, said Centaline chairman Shih Wing-ching one week ahead of the Policy Address release, as they are currently leaning towards loaning to residential properties and current return on shops is 4 to 5 percent, with the risk being relatively low.
He also noted that the government could also consider lowering the stamp duty on commercial and industrial properties to stimulate transactions and gradually restore market confidence, in light of a 40-year-high commercial property vacancy rate of 12.5 percent, at a forum held by think tank 107 Momentum on the chain effects of the poor commercial property market.
Tony Kwok Tak-leung, chairman of Guangdong Hong Kong Macau Greater Bay Area General Chamber of Real Estate Industry, stated that current mortgage interest rates are at least 5 to 6 percent, yet shop owners who continue to make payments are still being called into loans by banks.
Raymond Ho Man-kit, convenor of 107 Momentum, stated that the rapid decline in commercial property prices quickly drains available social capital, suppressing investment and consumption. On the other hand, banks are pressuring owners to lower prices to repay debts while refusing to grant mortgages to new buyers, further shrinking transactions and creating a vicious cycle.
