• Colliers’ response over the government’s land sale programme

    28 February 2025

    Regarding the government’s land sale programme for the 2025/2026 fiscal year mentioned in the Budget, Kathy Lee, Head of Research and Retail Consultancy at Colliers Hong Kong, has the following response: 

    Kathy Lee, Head of Research & Retail Consultancy commented, “In the Budget, the Financial Secretary stated that the government plans to release 11 residential sites,  including one railway and one bureau site, in this fiscal year. Among these sites, three were rolled over from the 2024/25 Land Sale Programme, located in Stanley, Sai Kung and Tung Chung Area 106A. As for the five new sites, they are located in Shau Kei Wan, Jordan Valley, Ngau Tau Kok, Tuen Mun and Tsuen Wan, all of which are  urban area with well-developed facilities, reflecting government’s consideration of the prevailing market condition and the capacity of developers. It was also announced that commercial land sale will be suspended for the coming year, and some commercial land may be rezoned for residential use. The forecasted land revenue for this fiscal year is HKD 21 billion, a 39% reduction from last year’s HKD 33 billion. Notably, the Budget also announced an extension of the land exchange deadline for the original site in Hung Shui Kiu, giving developers more time for budget planning and market response, reflecting the government’s willingness to listen to industry demands and aligning land sales expectations with current market conditions. 

    Kathy Lee added, “Looking back at the previous fiscal year, the government’s land revenue was approximately HKD 13.5 billion, only about 40.9% of the original budget. Stamp duty revenue was HKD 58 billion, also HKD 13 billion less than the original budget. However, with the comprehensive removal of property cooling measures and the gradual effectiveness of talent introduction policies, demand has stabilized. Additionally, the Federal Reserve’s consecutive interest rate cuts since the third quarter of last year have somewhat boosted market investment sentiment. We are glad that the government’s land sale strategy has adapted to the market sentiment, thus successfully selling residential sites in Sha Tin Siu Lek Yuen and the Tung Chung New Extension Area, as well as a logistics site in Tsing Yi, through offering smaller plots and simplified conditions. The two multi-story industrial buildings in Yuen Long South and Hung Shui Kiu that are under open tender will also be postponed, giving developers more time to assess the feasibility. Assuming the overall economic situation remains unchanged, it is optimistic that government will achieve the new fiscal year’s land revenue target by leveraging current market momentum, land strategy, and price expectations.” 

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