Chan eyes instalment option to breathe life into land sales

Staff reporter

Hong Kong may consider allowing instalment payments for land sales, said Financial Secretary Paul Chan Mo-po, as the real estate sector urges the government to do so to incentivize the developers amid a weakened property market.

The multiple payments of land premiums are not absolutely infeasible, Chan said at a Legislative Council meeting following Wednesday's Budget announcement, adding that the proposal is included as an option in the administration's consideration.

It comes as the local real estate sector remained sluggish and the land premiums booked by the government only met 41 percent of the official estimates.

The latest land sale comes from Sun Hung Kai Properties (0016), which won a residential site in Tung Chung for HK$602 million, or HK$1,501 per square foot, the lowest for nearly 11 years.

To boost the developers' appetite, local think tanks and LegCo members called on the government to adopt various initiatives, including allowing the builders to pay for the land premiums in multiple payments.

Before Chan's latest response, the Secretary for Development Bernadette Linn Hon-ho said last July that the instalment payments would affect the government's cash flow and could barely help the developers.

When asked about the possibility of downsizing the large-sized plots to facilitate land sales, Chan said the measure is inappropriate for some projects as they need scale effect.

The financial secretary also said that the government is fully committed to promoting Northern Metropolis but will re-examine the Lantau Tomorrow Vision.

Meanwhile, Chan emphasized yesterday that the projected land premium of HK$21 billion for the next fiscal year is not a target.

In other news, there has been no surge in owners withdrawing sales or raising asking prices after the government lowered the stamp duty for homes under HK$4 million, Midland Realty said.

Separately, the government has been in close liaison with the credit rating agencies to ensure that they are aware of Hong Kong's specific situation, debt issuance plan and financial management logic, said Secretary for Financial Services and the Treasury Christopher Hui Ching-yu, adding that the administration's debt level is controllable.

Hong Kong Monetary Authority will explore the room for issuing bonds of longer tenors to meet the financing demand for some infrastructure projects in the future, said chief executive Eddie Yue Wai-man.