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Hong Kong to price land sales to market, official says

[HONG KONG] The Hong Kong government is prepared to sell into a falling market to meet commitments to supply land for flats and other developments, a senior official said on Thursday.

Hong Kong Secretary for Development Paul Chan said base prices would be set for tenders, but the government did not have a policy requiring it obtain the high land premiums of recent years.

He was speaking at a news conference to unveil the government's land sale programme for fiscal 2016-2017, which will make available 29 residential sites that could supply 19,200 flats - the largest such number since 2010.

Two tenders were recently cancelled and a plot of land in the northern area of Tai Po last week sold for less than expected. Another major tender closes on Friday. "We don't have a high land premium policy, so we sell land according to market conditions," Chan said.

Home prices, construction costs, competition, the characteristics of individual plots and other "difficulties" all played a role in pricing, he added.

"If none of the tenders reaches that base price we will not sell the land," he said. "We ensure that public resources are safeguarded." Chan also said the government would sell eight commercial sites, for a total area of 536,000 sqm (5.8 million sq ft) and three hotel sites, which could provide about 2,100 rooms.

The government has committed to providing 18,000 flats this year through a combination of government land sales, Urban Renewal Authority and MTR sites as well as private sites.