Impact of the Policy Address's housing strategy to be limited in the short term

Posted: Jan 20 2015Last Updated: Jul 14 2017
Hong Kong Policy Address 2015, CY Leung16 January 2015 - In terms of Hong Kong property, this year’s Policy Address continued to focus on boosting housing and land supply, with no mention of any adjustment to the cooling measures currently in place. Many have expressed doubts over the achievability of the proposed housing strategy, and criticized the lack of a short term solution to the pressing demand problem.
"Increasing and expediting land supply is the fundamental solution to resolve the land and housing problems of Hong Kong," said Chief Executive, C Y Leung in the Policy Address. Targeting the goal of 480,000 residential units in the next decade, Leung emphasized the government’s commitment to increasing land supply for public, subsidized, and private housing. In terms of the private sector, he expected a 30% increase in average annual supply from 11,400 units over the past five years to 14,600 units in the next five years.
Patrick Wong, Director of Property Research at BNP Paribas Securities (Asia) stated in an SCMP article that the Policy Address focused on releasing more land, which is unlikely to have any impact on the market over the next few years.
Holding a similar view, Bank of China’s Economic Analyst Cheuk Leung suggested in an RTHK interview that the Policy Address cast limited influence on property prices in the short term, given that no further demand suppressing measures were mentioned in the plan. He added that more development projects are expected to be completed by 2017, which is the time he believes property prices will be affected.

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