A large part of the reason for this phenomenon is the shortage of land supply in Hong Kong. With the housing shortage becoming increasingly prominent, Hong Kong society has recently launched a heated discussion on increasing land supply, and some real estate developers have responded.
Just now, the development of the new world, one of Hong Kongs four major families, announced at yesterdays performance conference that it would donate 3 million square feet of farmland to alleviate the housing shortage in Hong Kong.
As soon as the news came out, the market was shocked by the lack of any precautions.
New World donates 3 million square feet of farmland
Building houses for government, social enterprises
According to Xinhua News Agency, Hong Kong New World Development Co., Ltd. announced on September 25 that it would donate part of its agricultural land to build public housing, hoping to alleviate the shortage of housing in Hong Kong.
Zheng Zhigang, executive vice chairman and general manager of new world development, announced at the groups performance conference that the group will donate 3 million square feet (more than 270000 square meters) of agricultural land in different locations, including the SAR government, social enterprises or charities, for the construction of public housing and related facilities to give back to the society.
Zheng Zhigang is the eldest grandson of Zheng Yutong, one of the four families. He is the richest post-80s generation in Hong Kong. Graduated from Harvard University, Zheng Zhigang won the second place among Asias top ten young billionaires with a family of 4.4 billion US dollars.
The fund gentleman looked at it and sorted out some details.
1. How much land is donated? Three million square feet of farmland, about 278,700 square meters.
The area of 39 standard football fields is equivalent to that of 1.9 million square feet in Victoria Park. That is to say, the area of farmland donated by the New World is about 1.5.
Based on the HK$1124 per square foot compensation recovery price set by the Hong Kong Government this year, the value of this part of land is about HK$3.372 billion, which is equivalent to about HK$3.37 billion donated by the New World.
One million feet of land is donated to social enterprises to have light (equivalent to a charity).
In addition, other land allocation arrangements will be studied by other non-profit organizations. It is not excluded that they will be used to build public housing for the Hong Kong Government.
4. Why did it suddenly come out?
Zheng Zhigang stressed that the group should take more social responsibility in the future, rather than just consider the interests of shareholders. In addition, he said that preparations for relevant plans and the signing of MOUs had begun a year ago and would not be announced until today.
5. How many people benefit?
According to reports, the first step is to allocate 28,000 square feet of land adjacent to Tianshuiwei Railway Station to social enterprises to build the first large-scale Creative Society Housing project in Hong Kong, Guangcun, which provides more than 100 units with an area of about 300 feet, benefiting 10,000 citizens. The primary goal is to help low-income families with children. The project is expected to be completed as soon as 2022. The period of land allocated to Want Light is 28 to 2047.
6. The purpose of doing so?
Zheng Zhigang disclosed that the donation of farmland is out of social responsibility, and has nothing to do with whether the Hong Kong Government quotes the Land Recovery Ordinance. In order to avoid the misunderstanding of the society that the donation of farmland in the new world will involve the transfer of interests, the donated farmland is surrounded by no other new world land.
7. How much is the rent?
According to the New World, beneficiary families can not renew their leases after signing a lease for three years, but the average renter can leave for two years, with a turnover rate of 100%. The level of rent to be paid will depend on the actual situation of each family. For example, if there is a long-term illness, the rent will be relatively cheap; non-queuing system, accommodation will be matched by social workers.
8. Not temporary or cheap housing
9. Guangcun has four characteristics
10. How much land is there in the New World?
According to the Group, as of the end of June this year, the land reserve held in Hong Kong, which should account for about 9.1 million square feet of total floor area, can be developed in real time, of which the total floor area of property development is about 4.2 million square feet. At the same time, the Group holds a total of 16.9 million square feet of agricultural land in the New Territories. If the part of farmland is donated this time, it will account for about 18% of the farmland held by the group.
Do the other three rich families follow suit?
According to statistics, the concentration of wealth in Hong Kong is close to 80%. Most of the top 10 wealthy people in Hong Kong are rich in real estate. Up to now, many industries in Hong Kong have been monopolized by a few brand real estate developers. Real estate developers gradually extend their control over buildings to various shops such as transportation, electricity, telecommunications, supermarkets and so on, and constantly enhance their comprehensive economic strength. Their industrial layout also spans from real estate to telecommunications, ports, department stores and even water, electricity and gas, which firmly controls Hong Kongs economy. Their actions even affect the future development direction of Hong Kong.
As we all know, there are four big families in Hong Kong, including Li Ka-shing, Guo Desheng, Li Zhaoji and Zheng Yutong, who are mainly developed in real estate.
This time, the Zheng Yutong family donated 3 million square feet.
What do other families like Li Ka-shing think about this?
According to Hong Kong media reports, Changshi spokesman responded that it takes time for the development of farmland housing to be completed, and it may take longer for people in need to benefit from it. He will study this aspect. The spokesman said that the Li Ka-shing Foundation and Changshi have been directly supporting different social welfare projects through donations.
The permanent base property of the Li Zhaoji family, in response, pointed out that in the past, donated land to build homes for the elderly, youth dormitories, and providers for transitional housing. Hengdi said that he was willing to consult with the government to actively help increase the supply of housing and take care of the needs of different classes.
In 2012, Li Zhaoji, founder and former chairman of Hengji Real Estate, expressed his intention to donate farmland located in Yuen Long and Fanling to the government for housing construction, claiming that 3,000 to 4,000 units could be built.
Finally, Li Zhaoji donated land to Baoliang Bureau and Humanity Bureau respectively to build youth dormitories and elderly dormitories. A total of 1 405 elderly accommodations are provided in the old peoples homes in Landi, Tuen Mun, which are expected to be completed between 2020 and 2021.
Four major developers hold about 9.3 million square meters of farmland
Above is the land use situation in Hong Kong. It can be seen that farmland, wasteland, woodland and ponds account for 75.7%, while residential land accounts for only 6.9%. Even though 6.9% of the residential land is in suburban villages with ultra-low density, only 3.8% of Hong Kongs land is occupied by real high-density residential development.
That is to say, as long as Hong Kong takes out 2% of its land to build high-rise residential buildings, it will be enough to increase the urban residential area by 50%.
Silver Merrill Lynch research data show that the four major Hong Kong developers (Hengji, Xindi, New World, Changshi) hold about 100 million square feet of agricultural land (about 9.29 million square meters). Specifically:
Hengji ranks first, holding about 45 million square feet of agricultural land, accounting for 40.5 percent; New Land holds about 30 million square feet of agricultural land, accounting for about 30 percent; New World holds about 16 million square feet; Changshi ranks fourth, holding about 9 million square feet of agricultural land.
In order to increase land supply, the Hong Kong government considers releasing the development potential of existing habitats through various channels. For the farmland held by developers, it has also become one of the potential housing supply. According to Bank of America Merrill Lynch research, Hong Kongs four major developers, including Henderson and new land, hold the most chips and have the most opportunities to cooperate with the government.
Who knots the death knot of Hong Kongs property market?
According to the Securities Times, Hong Kong has a mountainous terrain and a large area of country parks and wetlands. According to public data, the land area of Hong Kong is 1111 square kilometres, and 24.3% of the land has been constructed, of which only 6.9% is for housing, while the remaining 75.7% is for country parks and ponds. On the one hand, high property prices and rents, and almost indefinite waiting for public housing, on the other hand, there is a large number of idle undeveloped land.
However, with so much land, housing is not as easy as people think.
According to the Securities Times, Yuen Long Shui Wai Village, the government has to collect land, how much is it? The government offered a floor price of HK$1300 per square foot (equivalent to HK$14040 per square meter). Many villagers preferred not to sell it because they thought it was too small.
If the price is too high, other villagers will oppose it. Why is it that the government collects the farmland of Shuiwei Village at such a high price? Why not collect the land of our village?
Miss Zhang, who lives in Yuen Long, said that it would be understandable if the government took 1,300 Hong Kong dollars per foot of land for farming, but if it was to build houses and sell buildings, the land would not be farmland. That was the price of real estate. Villagers were reluctant to sell it, and the government could not force it.
Second, we cant recycle the villagersland, so what about the realtors land?
The biggest problem in using the Land Recovery Ordinance to buy back the land in the hands of real estate developers is that the government needs to buy back the land at the market price, which is obviously higher than the price when the real estate developers first bought the farmland. Many citizens therefore criticized the government for colluding with real estate developers and suspected of interest transmission.
The government demands to intervene in the private market and require real estate developers to build public housing. Then the government must provide economic incentives for developers, change land use, increase floor area, etc. Only by making real estate developers profitable, can it have the opportunity to attract them to participate actively in the plan. The ownership of private projects and the release of public resources inevitably tend to the interests of developers, and the plan has essentially been made. Put the commercial interests of developers above the public interests. Working in Mong Kok, said Miss Lee, a Hong Kong resident.
At present, Hong Kongs four major developers, Hengji and Xinhongji, have 104.5 million square feet of farmland (about 1,000 hectares) in the New Territories for the development of Yangtze River Industry and New World. Hengji alone has 45.9 million square feet of farmland reserves that have not yet been developed.
Hong Kong is not without land, we have a lot of places, but many of them can not be moved. The total population of Hong Kong is very small, but there are a lot of opposition voices, there are many different interest groups, so this is why successive governments have failed to solve the crux of the Hong Kong property market. Professor Lei Dingming, Director of Economic Development Research Center of Hong Kong University of Science and Technology, said.
Third, reclamation plans have also been stranded
According to Lin Zheng-yuees Tomorrow Island plan in her Policy Address, this is a large reclamation project for 20-30 years, which is developed in three stages. The ultimate goal is to connect the new artificial island, North Lantau Island and West New Territories, filling the sea area between the West and East Lantau Island, with a total area of about one fourth of the island.
It is reported that the Tomorrow Lantau project has been grounded due to obstruction from all sides.
To solve the housing problem, Hong Kong cant wait any longer!
According to Peoples Daily, recently, the Hong Kong Civil Construction Federation published a full-page advertisement in the newspaper urging the government to quote the Land Recovery Ordinance to increase land supply, build a large number of public housing, shorten the waiting time of public housing, and strive to achieve the goal of three years upstairs.
The housing problem in Hong Kong is obvious to all and is becoming more and more serious. The average waiting time for public housing applications has risen to 5.4 years, with 100,000 people living in coffin houses and barracks. Such a situation is incompatible with the well-known international metropolis and is in sharp contrast with the luxury houses on Mount Taiping.
To invoke the Land Recovery Ordinance means a balance of interests between private property and public interests. These lands mainly refer to the land that has been hoarded in the hands of real estate developers for a long time. Due to the protection of private property rights in Articles 6 and 105 of the Basic Law, and the long-standing judicial review or invocation of the Regulations, the SAR Government has hesitated to invoke the Land Recovery Ordinance.
However, it is feasible to recover land after all roads are blocked. According to Article 105 of the Basic Law, compensation for expropriation of land corresponds to the actual value of the property at that time, and recovery is paid. For the public interest, in order to solve the livelihood of the people, it is time for real estate developers to release the greatest goodwill, rather than just play their own abacus, hoarding strange land, making the last copper. What is responsible for Hong Kongs future? What is open side to young people? Thats it.
On the housing issue, Hong Kong has missed many historical opportunities and can no longer delay them. Tung Chee-hwa put forward the Eighty-Five-Year Plan at the beginning of his term of office, proposing that no less than 85,000 public and private housing units should be built each year so that 70% of Hong Kongs families can buy their own houses within 10 years; Liang Zhenying took solving the housing problem of citizens as the primary task during his reign, and proposed speeding up the construction of public housing; Lin Zheng-yue put forward the Tomorrow Island plan for reclamation of islands after coming to power... But these schemes, which are entirely in Hong Kongs long-term public interest, have come to an abrupt end, have been discounted, or have been stranded so far, and they are in a very bad way.
The reason for this is that both the opposition Rabbi in the Legislative Council opposed it, let alone the Tomorrow Lantau project itself, and even the Appropriation Bill for the study of the plan was put on hold in the Legislative Council because of political struggle; as well as the real estate developers, for the sake of vested interests, constantly coerced the government and bound public opinion, which made the whole Hong Kong society unable to buy, fall, live and build houses. It is also because some people do not understand and trust the ability of the SAR government to improve peoples livelihood. This time, can Hong Kong society put aside its political opinions and sit down calmly and think about the Land Recovery Ordinance? Can we put aside prejudice and rationally view the efforts made by the SAR Government for the peoples livelihood? Can we face up to the balance between the public and the private, and really think far for Hong Kong?
Hong Kong cant wait any longer.
Source: Zhong Qiming_NF5619, Responsible Editor of China Fund Newspaper