Hong Kong will add artificial islands to counter a runaway property market that’s made the city the world’s least affordable for housing.
The government will aim to reclaim 1,700 acres (688 hectares) off Lantau Island, the city’s Chief Executive Carrie Lam said Wednesday in a policy address. That compares with the 1,670 acres of extra land that a previous government report estimated the city needed through 2046.
“Finding land is the pressing problem that we need to tackle urgently,” Lam told the city’s legislators. “We must make bold decisions.”
Land reclamation in notoriously crowded Hong Kong has long been a controversial option to boost the supply of homes due to environmental concerns. But public outrage over a crisis in housing affordability is encouraging officials to act, even as the property market is showing signs of cooling after years of stratospheric gains.
To mitigate opposition to reclamation, Lam has said most of such land will be earmarked for subsidized housing. As many as 1.1 million people could live on the artificial islands, she said. That’s about 15 per cent of Hong Kong’s current population. The first phase of reclamation work would start in 2025, with people able to move in by 2032, Lam said.
Other measures would include: allocating about 70 percent of new land to public housing; moving faster to convert so-called brownfields sites, such as deserted rural land in the New Territories, to residential use; and setting up a land sharing pilot program that could turn land held by developers into projects that accommodate both public and private housing.
An almost 15-year bull run in prices prompted UBS Group AG to last month name Hong Kong as the city most at risk of a housing bubble. Still, rising mortgage costs -- the city’s prime rate was increased for the first time in more than a decade last month -- have weakened sentiment and banks are beginning to trim their property valuations.