Response to the 2012-13 Budget: RICS Supports Policies and Measures of Land Supply


HONG KONG, Feb. 2, 2012 /PRNewswire-Asia/ -- Royal Institution of Chartered Surveyors (RICS) Hong Kong supports the HKSAR Government's initiatives to ensure sufficient land supply in order to maintain a stable environment for the healthy and sustainable development of the local property market and various measures to increase land supply in short term.

Increasing land supply with multiple measures

RICS Hong Kong is of the view that, to ensure a stable property market in the next decade, lands need to be made available annually for some 20,000 private residential flats on average. A sufficient large land reserve is required to be built over a period of time to ensure both stable land supply for the residential property market and home prices. RICS Hong Kong expects that the Government's proposal, that is to review the land of nearly 2,500 hectares of land in northeast New Territories, Hung Shui Kiu, Tung Chung along with various quarry sites; reclamation outside Victoria Harbour, and development of caverns, could meet the demand for land in a number of years to come.

Regarding the land supply in the short term, the RICS envisages in the Government will continue to put up land for sale proactively with land sale programme being announced in advance on a quarterly basis. Such measures, coupled with an overall increase of land supply in 2012 and a close observation of the market response, would give a positive and healthy effect to the residential property market.

RICS anticipates that the relieving measures, include extending the entitlement period for the tax deduction for home loan interest from 10 years of assessment to 15, and maintaining the current deduction ceiling of HK$100,000 a year, will enhance citizens' affordability and also assist middle-class citizens in purchasing homes and hence the healthy growth of the property market.

Increasing office land supply

Hong Kong, as the leading financial and business centre in the Asia Pacific region, sees fierce competition for quality commercial accommodation and office space. Last year, RICS Hong Kong carried out a study of the Grade A office market in Hong Kong. The supply of the appropriate type of office space is crucial to the sustainable development of Hong Kong as a world class city. RICS Hong Kong is concerned about the supply of office space and the impact on local businesses and those who wish to establish a presence in the city.

According to the research by RICS, demand for office space between 2011 and 2014 is likely to amount to 1.3 to 1.9 million square feet. These figures, based on variables such as employment and GDP, suggest that even in the worst-case scenario -- where Hong Kong's GDP drops by 5% -- the demand will be equal to planned supply. Given the promising long-term prospects of growth and the underlying strength of RMB offshore businesses, however, it is very likely that demand will surpass supply in the near future.

RICS Hong Kong envisages and is in support of the Government's development of new core business districts in Kowloon East. RICS anticipates that the future office developments at Kai Tak and the revitalisation or redevelopment of industrial buildings in Kwun Tong and Kowloon Bay, Kowloon East will certainly relieve the ever-increasing office demand.

Urban renewal

RICS had proactively participated in forums and meetings with Development Bureau, commenting on the role of Urban Renewal Authority (URA) and the new Urban Renewal Strategy (URS) over the past 2 years. In response to the URS proposal in the finalised paper document, RICS Hong Kong Board is supportive of implementing public participation approach and the URA as facilitator to help owners of old buildings to put forward redevelopment schemes.

When dealing with the revitalization of the industrial buildings, although a wholesale conversion may proceed without a unified title provided that as all the owners consent to the conversion, it is noted that certain old industrial buildings are not economically or technically viable for conversion, and may also have been fallen into multiple ownership. The URA will have a role to play in promoting redevelopment of industrial building of that kind. RICS welcomes URA's launch of a pilot redevelopment scheme for industrial buildings.

Commenting on the 2012-13 Budget proposed by the Financial Secretary, Mr Kenneth Kwan, Chairman of RICS Hong Kong said, "RICS is pleased that our views on land supply and land use policies have been taken into consideration in this year's Budget. The Budget has responded to growing public concern over home prices and land supply. We welcome the announcement on the Government's plan and efforts to maintain a balanced development of local property market. We trust the Government is determined to put forward new commercial district development and urban renewal with concrete measures."

About RICS & RICS Asia

RICS is the world's leading qualification when it comes to professional standards in land, property and construction.

In a world where more and more people, governments, banks and commercial organisations demand greater certainty of professional standards and ethics, attaining RICS status is the recognised mark of property professionalism.

Over 100,000 property professionals working in the major established and emerging economies of the world have already recognised the importance of securing RICS status by becoming members.

RICS is an independent professional body originally established in the UK by Royal Charter. Since 1868, RICS has been committed to setting and upholding the highest standards of excellence and integrity -- providing impartial, authoritative advice on key issues affecting businesses and society. RICS is a regulator of both its individual members and firms enabling it to maintain the highest standards and providing the basis for unparalleled client confidence in the sector.

The RICS Asia supports a network of over 11,000 individual professionals across the Asia Pacific region with an objective to help develop the property and construction markets in these countries, by introducing professional standards, best practice and international experience. It promotes RICS and its members as the natural advisors on all property matters. It also ensures that services and career development opportunities are provided to members.

The RICS Asia region covers national associations and local groups locating in Brunei, Malaysia, Singapore, Thailand, The People's Republic of China and the SAR Hong Kong. It also has members working across the region such as Bangladesh, Bhutan, Burma/Myanmar, Cambodia, Indonesia, Japan, Kiribati, Laos PDR, Macao, Mongolia, Nepal, North Korea, South Korea, Taiwan, The Maldives, The Philippines, Timor East and Vietnam. For more information, please visit:

Media enquiry, please contact:

RICS Asia Public Relations Representative
Mr. Andy Hung / Mr Timothy Wong
Tel: +852-2372-0090
Fax: +852-2372-0490
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Source: Royal Institution of Chartered Surveyors