Record land sales will shrink Hong Kong deficit, but not enough to justify big spending, finance chief says

The sale of several prime urban sites helped the city hit a record high of HK$40 billion as of last month, while brisk exports have also boosted recovery

But land sale gains not enough to cover gap created by major jumps in recurrent spending over past five years, Paul Chan says

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A record-setting HK$50.8 billion was paid for a 50-year land grant on a prime piece of harbourfront property, the government revealed last week. Photo: Winson Wong

Published: 1:46pm, 7 Nov 2021Updated: 11:16pm, 7 Nov 2021

Hong Kong will run a smaller deficit than expected this financial year because of increased income from land sales, but it will not translate into major spending increases, the city’s finance chief said on Sunday.

Financial Secretary Paul Chan Mo-po said revenue from land sales hit HK$40 billion (US$5.1 billion) as of last month – a record high – following the sale of several prime urban sites.

Those sales fuelled confidence in the property markets which, in turn, prompted developers to pay a premium for development projects, he said.

The city’s economy was also gradually recovering on the back of brisk exports and the successful containment of the coronavirus pandemic, according to Chan

“With the vibrant property and stock markets seen in the first half of the year, the stamp duties on property and share transfers have generated higher-than-expected revenue,” he wrote on his official blog on Sunday.

“It’s expected that the fiscal deficit for this financial year will be much smaller than the estimates we made at the beginning of this year.”

Record land sales will shrink Hong Kong deficit, but not enough to justify big spending, finance chief says

The sale of several prime urban sites helped the city hit a record high of HK$40 billion as of last month, while brisk exports have also boosted recovery But land sale gains not enough to cover gap created by major jumps in recurrent spending over past five years, Paul Chan says

The sale of several prime urban sites helped the city hit a record high of HK$40 billion as of last month, while brisk exports have also boosted recovery

But land sale gains not enough to cover gap created by major jumps in recurrent spending over past five years, Paul Chan says