Ongoing land creation key to ensure Hong Kong government is in control of supply: John Lee

John Lee says government can reserve land and dismisses concerns earlier raised by former leader Leung Chun-ying about risks of oversupply

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John Lee has said the continuous creation of land is needed to protect the people’s interests. Photo: Edmond So

Published: 1:10pm, 29 Oct 2024Updated: 10:54pm, 29 Oct 2024

Hong Kong’s leader has said creating land continuously is necessary to guarantee that the government is in control of the supply and can protect people’s interests, dismissing a predecessor’s concerns about financial risks.

Chief Executive John Lee Ka-chiu on Tuesday addressed concerns raised by former city leader Leung Chun-ying, who earlier warned that a sharp increase in land supply without accurately estimating the demand in coming years might result in negative equity and fiscal challenges for the government.

In defending his approach, Lee referred to a time when the government halted land creation and froze sales in the early 2000s in response to a market downturn, which he said had led to “undesirable” outcomes.

Former chief executive Leung Chun-ying has raised concerns about the risks of land oversupply. Photo: Dickson Lee

“Experience tells us that insufficient land creation resulted in insufficient supply, out-of-control property prices and difficulties for residents seeking home ownership,” he said.

“For the housing market to develop healthily, the government must seize control of the land issue. Otherwise, those with vested interests will be in the driving seat, which is not in the interests of residents.”

Speaking before a weekly meeting with the key decision-making Executive Council, Lee said the government could always reserve land, equating it to building up funds in a bank instead of spending them all at once.

“Land creation often takes a long time. We have to create it continuously. When necessary, we can release land to the market for property development. Otherwise, we can keep it in our land reserve,” he said.

The Long Term Housing Strategy Annual Progress Report, released on Monday, projected that the gross total housing demand would reach 438,000 flats over the next decade. To meet the demand, the government aimed to supply 440,000 flats.