Former Hong Kong Leader CY Leung Raises Concerns Over Potential Housing Oversupply Amid New Development Projects

Ex-Hong Kong chief, CY Leung, issues warning about possible housing surplus

Leung alerts about the possible excess of homes due to new developments, advising meticulous demand forecasting and financial management to prevent problems.

Ex-Hong Kong chief, Leung Chun-ying, has expressed worries over the potential dangers of an oversupply in the real estate market, following the government's commitment to increase the number of residential units in newly developed large-scale areas.

Leung, who served as Hong Kong's chief executive between 2012 and 2017, stated in a recent social media post that Hong Kong is currently facing a lack of land and housing. However, he cautioned that increasing the supply in the future may not necessarily be beneficial. His post was titled "preventing oversupply".

The authorities have put forward the Northern Metropolis initiative, a plan worth HK$224 billion (US$28.7 billion) designed to transform 30,000 hectares (74,000 acres) of land into a residential and economic growth area. The project, encompassing Kwu Tung North and Fanling North, is expected to house 226,700 individuals and generate approximately 53,100 new employment opportunities, as per the government's statement.

Leung also expressed doubts about the projected future demand. He pointed out on Facebook that the significant rise in supply and the drastic drop in property prices may indeed address the housing issue. However, he wondered how the subsequent issues of negative equity, financial difficulties, and governmental fiscal challenges would be managed.

Leung stated that previously, the government used to generate revenue from selling land while establishing new regions. However, as the development density in these new regions decreases, the earnings per square foot of land have seen a decline.

He stated that it's necessary to gauge the level of demand, quantify the planning for supply, and earmark the government's financial income and expenses for the advancement of new districts.