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Time of India

Hong Kong plans to sell artificial island in Lautau waters, Finance Secretary raises red flag

Rejecting notions that the government is planning to find and sell parcels to offset the deficit, Hong Kong will press on with building up its land bank but adopt a cautious stance on selling the sites, according to Financial Secretary Paul Chan Mo-po. Chan admitted in a recent interview that the government planned to build artificial islands off Lantau coast 'later', despite calls from developers to immediately withhold the project. 'We will not stop (creating land) because of property prices and the market; we will keep producing land,' he said. 'Having created the land, we don't need to sell it immediately. It can form part of our land bank. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like How Much Does It Cost to Rent a Private Jet - The Prices May Surprise You! Private Jet I Search Ads Learn More Undo 'The message is that the government has land. But how and when to sell it, we will act according to market conditions. At the moment, it is of utmost importance to manage expectations and confidence … we will put (the land) on the market cautiously. 'Some have suspected that the government hopes to sell land to cover its budget deficit. That's not the case.' Live Events Outlining a series of measures to cut public expenditure and raise revenue, Chan revealed a deficit of HK$87.2 billion (US$11.1 billion). Figure was reduced 8 per cent to HK$80.3 billion amid stamp duty income and lower-than-expected departmental expenditure. Avoiding systemic risk and panic in the market, Chan said that property prices decreased by 28 per cent since 2019, thereby, adjusting the situation. However, the interest rate did not come down as quickly or immediately, due to inflation in the US. But, interest rates had already peaked and the property market stabilised Chan's comments came amid increasing negative equity prices since the fourth quarter of 2023 in real estate market. According to The Hong Kong Monetary Authority, the number of homes whose value declined compared to what owners would pay for mortgages rose to 6.1 per cent reaching 40, 741 cases during the first quarter in comparison to the previous quarter. Risking bidding prices of land value in Northern Metropolis megaproject near Hong Kong's border, Louis Loong Hon-biu, law maker and secretary of the Real Estate Developers Association, called on the Hong Kong government to stall operations of building artificial islands off the coast of Lautau waters. He added that developers would be conservative in their decisions in investing in the Northern Metropolis megaproject, as they could be able to access another source of land across the island ( Lantau project ). In another land luxe project from Hong Kong, estimated at HK$850 billion, is one among island residential properties with world -record holding real estate prices, the artificial islands at Lautau project, would also become the third central business district in Hong Kong. The project would build 210,000 homes for at least 550,000 people. Meanwhile, the Northern Metropolis megaporject, takes a more innovative and technological direction by hoarding in 2.5 million people and creating 650,000 jobs. The San Tin Technopole is the innovative tech hub spreading across 30,000 hectares (74,132 acres) which aims to bring new economic growth in the island. Chan opined that the government should first prioritize the feasibility of such projects, in response to a question from The South China Morning Post, on whether the government plans to take down the Lantau project. 'Our plan at the moment is to focus our energy to develop the Northern Metropolis, to make good use of this land. This is also important in terms of the collaboration with the GBA cities,' he said. In what could be construed as a win-win situation by pro-business politicans and an ulterior motive for limiting land resources by liberals, Chan made the above statement, referring to The Greater Bay Area, Beijing's scheme to integrate Hong Kong, Macau and Guangong into economic powerhouses. 'For the Lantau project, finish the studies and then let's do the Northern Metropolis first. The Lantau project, [we will] deal with it later,' he said. Chan added that if the project were to proceed, necessary feasibility studies had to first be conducted. Otherwise the city of Hong Kong is doing fine in terms of land space for development as of now, and that the Lantau project could wait. He also added that there were provisions for making financial difficulties less for developers, the monetary authority were taking a flexible approach and looked at it on a case-by-case basis. 'For those who can still repay interest, they [banks] are handling it in a lenient way, as everyone needs breathing space in the existing environment,' he said. Chan suggested the city's enterprises to be creative and apply technology and stay on top of consumer's preferences, amid a question from the SCMP reporter, who asked why the Hong Kong locals were increasingly moving to mainland China for goods and services. 'Competing [with the mainland] with lower prices could not be the way out,' he said. 'One can try adding orange juice to an espresso, just like some added Mao-tai to a latte on the mainland. You will get a chance if you are bold enough to innovate.'