Market research and proposed development scheme
1) Current supply and demand conditions of private residential housing for all different sectors in Hong Kong.
Amicably, according to such data implying that Hong Kong’s residential property market has experienced significant changes from the year 1997 up to the present as such prices fell by about 50 percent and had moved sideways during the past months. Ideally, prices have become much affordable to many families as such forecasts show that supply is ample and demand for residential home purchase has been weaker as the perceived investment value of property has reduced considerably. Thus, with such conditions as entirely diverse, the supply of public sector flats for example, the Home Ownership Scheme is competing with the private sector for customers and is threatening the stability of property market. (Cited from, Standard Chartered in Kong Trade Development Council, 2000) Aside, due to Asian financial crisis, such demand and supply conditions particularly, involving prices of private residential property had adjusted downwards drastically as shown in figure one (see, figure one).
Figure One
Source: Hong Kong Trade Development Council (April 2000). Time to Review Hong Kong’s Housing Strategy: Economic Forum, content provided by Standard Chartered. Copyright 2000-2008
Retrieved at:
<http://www.tdctrade.com/econforum/sc/sc000402.htm>
Moreover, while the existing level of property prices in Hong Kong remains high in comparison with major cities around the world, the drastic fall in prices has made residential property, affordable for many families in Hong Kong. The glut of HOS flats happens at a time when the private sector market is also suffering from insufficient demand (Cited from, Standard Chartered in Kong Trade Development Council, 2000). The newest figures released by the Rating and Valuation Department show that supply in recent years has risen but, the demand has not recovered so that the vacancy rate has risen in the past years (see, figure two).
Figure Two
Source: Hong Kong Trade Development Council (April 2000). Time to Review Hong Kong’s Housing Strategy: Economic Forum, content provided by Standard Chartered. Copyright 2000-2008
Retrieved at:
<http://www.tdctrade.com/econforum/sc/sc000402.htm>
There can be such projected level of supply during the year 2000 and 2001 respectively and the prospects that interest rates are then to rise in coming year, it looks likely that supply will continue to exceed demand in private sector market in coming months and after. Thus, recent indications are that prices of residential property in the market have undergone softening and such confidence in prospects of property market is fading slowly. (Cited from, Standard Chartered in Kong Trade Development Council, 2000) In order to minimize the disruptions of large supply of public sector flats on the functioning of private sector market, one possible solution is to turn as much as possible the HOS flats into public rental flats as this can possibly help reduce the waiting time for those families who are in need of public rental housing. (Cited from, Standard Chartered in Kong Trade Development Council, 2000)
2) Projected situation on supply and demand of residential housing in the following 5 years of Hong Kong as a whole plus a blow-up of the same in the area adjoining the project (Aberdeen and the southern part of the HK Island).
There can be investigation regarding such development conditions in such residential housing supply for the next 5 years specifically in, Aberdeen and the southern part of HK Island as in a way, there can be such effect from within Hong Kong’s supply of residential housing as such the need for Hong Kong government to positively conduct continuous studies on housing demand. Thus, focus on examining thesupply side of private housing in Hong Kong by givingoverview of Hong Kong’s housing supply situation to understand Hong Kong’s land tenure system as well as global synopsis of literaturerelating to the effects ofgovernmental land regulation, development control and restricted land supplyon the housing market. (Cited from, HK Property Review, 2006)
There can be such realization and application of certain development scheme in such approaches such as:
The first approach would enable comprehensive development scheme to be undertaken and envisaged that this could provide an exciting opportunity to develop a sound residential homes that can be surrounded by vibrant retail, cafe and commercial development. Thus, such residential development could increase the viability of the scheme and increase the likelihood of attracting better developer. The success of the scheme will depend upon such factors such as better access to high streets but can suffer high vacancy rates that might deter prestigious development which would be most suitable for the site. The land can be within separate ownerships, not all have been revealed to the District Council as the site may cover some commercial enterprises which are to come forward. (Cited from, Ho, 2001; Hui, Chan, Wong, Wong and Leung, 2000) The scheme can be intended to be private-sector and could only be implemented if it is residentially as well as commercially viable as much as possible. It should be noted that no approaches have been made to landowners to test their reaction to the scheme although all residents and businesses around the brief area were made aware of the proposals and invited to comment. In order to achieve adequate and affordable housing in future, the government can adjust its planning control by restricting uses, the densities, areas and approval rates of the developments. (Cited from, Ho, 2001; Hui, Chan, Wong, Wong and Leung, 2000)
Hong Kong government should focus on its planning policy so as to achieve a stable housing market in long term. The government should be aware of the impact of existing planning policy on the existing and future housing market. For example, if the government foresees demand for housing, it can streamline its planning application procedure, increase the residential zoning areas and increase the allowable development density in order to meet the future demand as having sufficient housing supply can the policy of adequate and affordable housing be met. (Cited from, Hui and Lui, in press 2002) Then, usually planning policies do not take immediate effects on housing market as developers require substantial time to develop the site into high-rise residential buildings. The government may consider providing some incentives for the developers to convert the existing use of land when there is need, the government should allow flexibility in its planning policy so as to adjust to the changing economic and demographic environment. (Cited from, Ho, 2001; Hui, Chan, Wong, Wong and Leung, 2000)
Furthermore, it can be ideal that such residential gross floor area of planning applications will be checked case to case basis as there indicates concept of development density control. The more the residential gross floor area approved, the more the relaxation is on development density. The increase in area of residential zoning will relax constraints on housing supply as well as increase in open space zonings will further constrain the housing supply amiably. Therefore, there should be policy of providing adequate and affordable housing against shortage of housing supply as well as land use regulations for control on residential development.
NOTES
Ho, S.M. (2001), The Land Administration System in Hong Kong, unpublished MPhil Dissertation, The Hong Kong Polytechnic University.
Hong Kong Property Review (2006). Rating and Valuation Department: Preliminary Findings
Hong Kong Trade Development Council (April 2000). Time to Review Hong Kong’s Housing Strategy: Economic Forum, content provided by Standard Chartered. Copyright 2000-2008
Retrieved at:
<http://www.tdctrade.com/econforum/sc/sc000402.htm>
Hui, C. M., Chan, P.C., Wong, K.W., Wong, K.C. and Leung, Y.P. (2000). The Supply of Land for Housing in Hong Kong. Research Monograph. Department of Building and Real Estate, Hong Kong Polytechnic University.
Hui, C.M. and Lui, A. (in press 2002). Rational Expectations and Market Fundamentals: With Evidence from an Asian City’s Boom and Bust Cycle. Journal of Property Investment and Finance.
Credit:ivythesis.typepad.com
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