Chief Executive, due to time constraints, I’ll keep my messages brief. I’ll speak on three interconnected topics: 1. Accelerating the development of the Northern Metropolis; 2. Revitalizing the property market, and 3. Improving land and housing policies. These are the recommendations from the Business and Professionals Alliance, with details outlined in our proposal.
First, the Northern Metropolis
BPA feels the same urgency as you with the expedition of the Northern Metropolis Development. But the current real estate market is sluggish and property valuations have dropped, causing many banks to hesitate in offering loans with real estate/properties as collateral, including project financing and especially, long-term loans. The most urgent task now is therefore to stabilize the property market and prevent it from further decline in order to restore the confidence of the banking sector.
Bloomberg published a report in relation to this problem two days, a copy of which I have provided to Stephen (Stephen Wong) before the meeting.
How to stabilize the property market?
BPA recommends:
- To stimulate transaction, raise the maximum value of properties chargeable to $100 stamp duty from $4 million to $6 million.
- Relax restrictions under the Capital Investment Entrant Scheme (CIES) by lowering the cap on the maximum value of residential properties from $50 million to $20 million or remove the cap all together, and allowing applicants to apply a maximum of $15 million of the requisite $30m investment towards residential property purchase.
- Seek Central Government’s support for the “Property Connect” scheme to allow mainland talent to transfer funds to Hong Kong for property purchases when settling here. These funds would be managed in a closed-loop system, ensuring no loss of national foreign exchange reserves.
While credit easing is crucial, we must also address concerns about oversupply. I am referring to the Lantau Tomorrow Vision project. This development plan, proposed by the previous Government in 2018, involves 1,000 hectares of land reclamation to create a third CBD at an estimated cost of $580 billion. At that time the Government had $1.17 trillion in fiscal reserve. The conditions are entirely different today.
The Northern Metropolis Development plan which covers one-third of Hong Kong’s land along with the strategic layout of “Finance in the South, IT in the North” has ruled the Lantau Tomorrow Vision obsolete. BPA recommends that the Government should give the market the clear message that the Lantau Tomorrow Vision project is shelved once and for all. The announcement will dispel concerns about oversupply in land and allow the Government, the business sector and the community to focus resources on developing the Northern Metropolis.
How to accelerate the development of the Northern Metropolis?
BPA recommends:
- Establish a Northern Metropolis Investment Promotion Office as soon as possible. It should be led by the Financial Secretary or relevant officials to strategically coordinate investment and talent attraction based on enterprise and professional needs, turning the NM blueprint into reality.
- Upgrade the current Northern Metropolis Coordination Office into a one-stop shop capable of coordinating various departmental approvals and steering approval progress across departments. It should also establish a mechanism of performance pledges and progress updates regularly to speed up approvals, in order to reduce the waste in time and resources to both the Government and developers.
Improving housing and land policies
Finally, regarding housing and land policy improvements, BPA recommends:
- Remove hindrances to urban redevelopment initiatives to facilitate rejuvenation of derelict areas and improve living conditions for residents.
- Introduce a “MPF First-Time Homebuyer Scheme” to allow young people to use their MPF contributions to purchase their first home.
