In a further attempt to provide more housing and bring down the cost of homes, government officials in Hong Kong have revealed they are exploring the idea of building an artificial island outside Victoria Harbour.
The proposal is one of 10 new measures the government is hoping to implement as a way of increasing land supply in the crowded city by 18 percent over five years. At present the plan would reclaim six square kilometres of land outside the harbour. The government is looking at an area in the waters between Hong Kong and Lantau Islands to see if the idea is feasible.
Other measures hoping to be introduced by the government include plans to build a new satellite town in the New Territories North. In the short to medium-term 3 square kilometres of land will be made available for housing with enough space for 129,000 units. The government has also hinted at lifting building restrictions in the Pok Fu Lam district.
Hong Kong’s chief executive Chun-Ying Y Leung who is the brains behind the plans said: “To respond more flexibly to society’s needs for land the government is determined to develop new land extensively to build up an abundant land reserve that can more than meet the short-term demand. That way, the reserve can be used to meet future demand in a timely manner.”
However not everyone thinks the ambitious plans will be completed in the time frame needed. Property advisor Nicholas Brooke who regularly advises Leung sees a number of hurdles that will need to be overcome. He said: “If you look at the plan that he’s mapped out, with every site that he wants to address, it faces challenges either with infrastructure planning or modifications, so the potential for slippage is quite high. Supply could remain tight even longer than in the short or medium-term.”
House prices in Hong Kong are expected to rise by five percent this year and any correction in prices will not be seen until the supply of housing increases or interest rates go up in the US, as the Hong Kong dollar is pegged to the US dollar. That means that a correction won’t likely take place until 2015.
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