Page 6 - land_housing_research_report_engv3

Preamble

The shortage of land supply continues to put Hong Kong in a dire situation where
housing – a priority concerning the public with significant implications – is regressively
undersized, undersupplied and underestimated. It has caused local property prices to
skyrocket beyond the norm of inflation, depressed the quality of life below historical trends,
and hurt the city’s long-term competitiveness as a centre of international business. As such,
Our Hong Kong Foundation (OHKF) believes that land and housing is currently one of
Hong Kong’s greatest challenges.

For the past three years, we have been conducting research and analyses on the city’s
private and public housing markets, providing periodic estimates in terms of supply and
demand as well as proposing solutions in the form of policy recommendations. In the third
of our “Land and Housing Policy Advocacy Series”, we provide a comprehensive forecast on
the supply of private housing between 2018 and 2022, along with new findings to explore
the factors behind Hong Kong’s sluggish development of liveable and workable spaces.

During the course of our research, we have noted the average size of newly
constructed residential units in recent years to be substantially smaller compared to the
previous norm. In other words, flats are shrinking in size, despite their surging prices today.
The number of “undersized” flats has increased from 64 units in 2014 to 1,066 units in
2019, a 17-fold increase. Known locally as “nano-flats”, they measure less than 215 sq ft
each, just enough space to park 1.6 regular-size 4-door cars.

A major reason for Hong Kong’s “undersupplied” housing market is that Hong
Kong has run out of developable land as the city had stopped creating new land for more
than a decade. As a result, rezoning has become the primary means of land supply, which
is highly uncertain and ineffective because of the lead time involved and public scrutiny,
causing many proposed projects to undergo rounds of delay.

Most importantly, we have found the actual demand for land and housing to be far
greater than that anticipated in the government consultation, “Hong Kong 2030+: Towards
a Planning Vision and Strategy Transcending 2030” (“Hong Kong 2030+”). According to
our analysis, the government has “underestimated” demand by neglecting to consider the
need to improve the per capita living space and increase the area for supporting facilities.
Hong Kong will need more than 9,000 hectares of new land (roughly three times the size
of Sha Tin) over the next three decades, instead of 4,800 hectares by government estimates.
Hence, OHKF reiterates its call for large-scale reclamation outside Victoria Harbour to
create land and develop new towns as a viable option to tackle the mounting challenge of
land and housing shortage.

04 | Lacunae in Land Planning: Undersized, Undersupplied and Underestimated