'No suppression' as Beijing seeks help in housing

Claims that Beijing is suppressing local property giants are "exaggerated" as the central government is only seeking support and cooperation from developers for more efficient housing policies, says Centaline Property Agency chairman Shih Wing-ching. Shih's remarks came after a Reuters...

Michael Shum

Thursday, September 23, 2021

Claims that Beijing is suppressing local property giants are "exaggerated" as the central government is only seeking support and cooperation from developers for more efficient housing policies, says Centaline Property Agency chairman Shih Wing-ching.

Shih's remarks came after a Reuters report at the weekend said Beijing officials met local developers several times this year in which tycoons were told to help solve the city's housing shortage. Reuters did not say where and when these meetings were held.

The report said tycoons were told that "Beijing is no longer willing to tolerate monopoly," sparking a plunge of stock prices of Hong Kong's five major developers, with Henderson Land Development falling by as much as 13 percent on Monday.

On a radio program yesterday, Shih said there is no reason for the central government to push developers into a corner while trying to solve housing problems.

In fact, he added, the future of developers is bright.

"I think the developers in Hong Kong still have an important role to play in the future The property in China is oversupplied, but not in Hong Kong. We need to build more, and who's going to build? [Private homes] have to be built by private developers," he said.

Shih said home prices will "surely go down" gradually over the next few years as supply grows and that will cause the government to suffer from a drop in land revenue.

"The government cannot rely on the revenue from the property sector too much in the future," he added.

On the same radio program, Anthony Chiu Kwok-wai, executive director of the Federation of Public Housing Estates, said he is happy to see private developers participating in public housing developments.

Chiu called on authorities to consider making developers and social enterprises work together to provide cheap subsidized housing units for rent to specific individuals or families.

The units can be similar to the Group B estate units under the Hong Kong Housing Society that target families of relatively higher income, he said.

Chiu also hoped the government can increase the tenants turnover at public rental housing estates.

"Instead of increasing the rent of public rental housing tenants whose income exceeds the limit, the government can consider saving the money for them to purchase subsidized housing flats in the future," Chiu said.

He suggested reviving the Long Term Housing Strategy Steering Committee, disbanded in 2014, to discuss the housing demand of different groups.

In the Reuters report, sources were quoted as saying that mainland officials have been telling Hong Kong's biggest property developers that "the rules of the game have changed" in closed-door meetings this year.

So property firms should help in housing policies and monopoly will not be tolerated, the sources added.

Sun Hung Kai Properties said it was confident about the future of Hong Kong and would continue to invest in the SAR and in other mainland cities.

Henderson Land and New World Development declined to comment, while CK Holdings did not respond to a request for comment from Reuters.

Developers have already taken measures to show the message was received as New World and Henderson have donated rural land as reserves for social housing, according to Reuters.

In recent weeks, Nan Fung Group, Sun Hung Kai, Henderson and Wheelock applied for the public-private partnership Land Sharing Pilot Scheme, the first applications since it was launched in May 2020.

The scheme offers developers an opportunity to build on a higher percentage of open land, but they must use at least 70 percent of the extra floor area for public housing.

michael.shum@singtaonewscorp.com