Is Hong Kong’s system of assessing land demand broken and in need of reform? Experts weigh in

Hong Kong should reassess its demand for land, taking into consideration structural economic changes and the government’s operating budget deficit, a leading finance policy adviser and a veteran surveyor said as the city leader dismissed his predecessor’s concerns about oversupply.

Professor Liu Pak-wai, a director at the Hong Kong Institute of Monetary Research under the city’s de facto central bank, made the call amid concerns in Beijing over developers’ reluctance to participate in government-led projects. Some observers said the companies were worried about a drop in land value if there was an excess of supply.

Former chief executive Leung Chun-ying, now a vice-chairman of the country’s top political advisory body, the Chinese People’s Political Consultative Conference, warned last month of a potential oversupply of land in the slow market, highlighting costly reclamation at a time of fiscal deficit.

But current leader John Lee Ka-chiu explained it was necessary to create a land bank to ensure the government was in control of supply.

Liu told the Post in an interview: “We shouldn’t stop producing land because of cyclical changes ... but I believe Hong Kong’s economy is experiencing some structural changes given the intensifying geopolitics and integration with the mainland.

“It’s timely to review and assess the demand for land, and how the government can pace the land production process.