Page 2 - LanHse_exec_summ_Part2_eng

The limited housing supply in the recent years as a result of shortage
in residential land has contributed to the rapidly rising home prices and
rents. Meanwhile, commercial rents of Hong Kong have also been on the
increase and significantly exceeding those of our major counterparts’ in
Asia as a result of insufficient commercial land supply. The office rents in
the Central Business Districts (CBD) of Hong Kong have been the highest
in Asia, commanding a premium of some 40% and 80% over Beijing and
Singapore respectively.

The vacancy rates of virtually all types of properties are at their
record-lows since the Handover, underlining the shortage of all types of
space in the city. The business owners and entrepreneurs have already
exhausted the use of all available hardware in Hong Kong.

Hefty commercial rents have severely weakened Hong Kong’s
economic competitiveness. The cost for multinational enterprises to
relocate business to Hong Kong has been the world’s highest. It was 60%
higher than that of Singapore and was 2.7 times that of Shanghai.

People’s livelihood is also affected by land shortage. From 1997 to 2013,
the number of public hospital beds has only increased by 4%. Worryingly,
Hong Kong’s population increased by 11% over the same period and
the median age rose by 8 years. The demand for healthcare service
should have intensified. With a rapidly ageing population, Hong Kong’s
healthcare system is set to be overburdened.

II. What Has Stalled Our Developments?

Reclamation in Hong Kong during 1985-2013

800

700

600

500
Size of reclamation (hectares) 400

300

200

100

0
1985-89 1990-94* 1995-99 2000-04 2005-09 2010-13

Note: (*) Excluding reclamation of 1,274 hectares at Chek Lap Kok and West Kowloon.
Sources: Legislative Council Research Division, Development Bureau.
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