Page 17 - Demo

Future supply could be improved to meet target, but not at the current rateAs the forecast for private housing completions in 2026–2030 is less certain than the forecasts for 2021–2025, three scenarios have been made to assess possible circumstances. Scenarios 1–3 factor in various levels of progress in four key land-supply sources with more Government influence: New Development Areas (NDAs), upcoming railway supply, major cases currently in land administration processes, and major cases currently in planning processes. In Scenario 1, private housing supply has been forecast based on the most up-to-date disclosures from government departments and property developers. If all things continue to progress at the current speed, it is expected that some 9,400 private housing units could be completed in the five years between 2026 and 2030 from various NDAs, mainly from Kwu Tung North and Fanling North, Tung Chung New Town Extension, Hung Shui Kiu, and Kam Tin South. Some 14,700 units should be supplied from upcoming railway supply, including development packages of Tung Chung East Station, Wong Chuk Hang Station, Kam Sheung Road Station, Lohas Park, and Siu Ho Wan. Some 3,500 and 3,400 units should be completed from major cases currently in the land administration and planning processes, respectively. In addition, it is forecast that a total of 29,000 units could be supplied from spade-ready sites, upcoming Urban Renewal Authority (URA) supply, and privately led urban redevelopments. Altogether, total private housing completions should reach 60,000 units in the five years between 2026–2030, averaging at 12,000 units per year. In the 2020 LTHS report, the Government stated that the private housing supply target for 2021–2030 would be 12,900 units/year. The forecast completion of 12,000 units/year in Scenario 1 means a 7% shortfall from the LTHS target.Scenario 2 then explores a case where the private housing completions could reach the LTHS target of 12,900 units per year. Rather than assuming that NDAs and upcoming railway supply would progress at the current speed, a one-year-ahead expedited timeline was assumed. For major cases currently in land administration processes and planning processes, a 5% extra delivery on top of Scenario 1 was assumed. The annual average private housing supply in 2026–2030 is estimated to be 13,300 units in Scenario 2, meeting the LTHS target. However, it should be noted that even at the level of 13,300 units as portraited in Scenario 2, the supply would still be lower than the 18,000-unit level as stated in the 2017 LTHS before the ratio adjustment in public/private housing supply target. As mentioned earlier, although we agree to the Government’s policy of shifting the public-private mix from 60:40 to 70:30, we believe it would be more advantageous if the total housing supply target is raised at the same time. Therefore, in our regard, even at 13,300-unit level, private housing supply would be still sub-optimal.In Scenario 3, a case of mirroring a one-year delay impact in NDAs and railway supply and a 5% haircut from cases in land administration and planning process is explored. Under such scenario, the annual average private housing supply in 2026–2030 is estimated to be 11,200 units, which means that the LTHS target of 12,900 units/year would be missed by 13%. 15