On the block: Director of Lands Patrick Lau said in view of the good auction results and strong market demand, more land is included in the list with greater choices in terms of size, location and variety of uses.

The Lands Department today announced the 2005-06 application list for the sale of Government land, with 35 sites, including 29 residential and six commercial sites.

The residential sites, all 22.1 hectares, can produce 11,000 flats. Ten of them are on Hong Kong Island, eight in Kowloon and 11 in the New Territories.

The six commercial sites, comprising 4.7412 hectares, are located in Central, Kowloon Bay, Tsuen Wan, Tin Shui Wai and Sai Kung. Four can be developed for hotel use readily, while the other two can be used for hotels pending planning permission.

11 sites rolled over

Director of Lands Patrick Lau said today that in line with housing policy, land supply is determined by market demand. That is why the Government has decided to continue to make land available mainly through the application list system.

"In view of the good auction results and the market demand, more land is included and greater choices in terms of size, location and variety of uses are provided in the new 2005-06 Application List," Mr Lau said.

"In addition, the 11 sites remaining unsold in the 2004-05 application list are rolled over in the new List for 2005-06."

He said the government will constantly keep in touch with the two railway companies and the Urban Renewal Authority on residential flats supply, adding they will supply 22,000 flats in 2005-06.

24 sites less than 1 hectare

Of the 35 sites, 24 are less than one hectare and should be attractive to small- and medium-size developers, and to provide variety, the list contains five residential sites suitable for super-deluxe developments.

The timing for launching sale of the sites in the new application list is also evenly staggered to encourage a the market's steady take-up rate of the sites and stabilise the supply of new units.

If all 29 residential sites are sold, they can produce 11,000 flats. The earliest estimated completion date for these flats is 2008. This will ensure adequate flat supply to meet market demand in future, Mr Lau said.

Mr Lau also announced a number of measures to improve the efficiency and transparency of the application list system's operation. These measures are:

* to simplify the deposit requirement by applying a simple rate of 10% of the bid price of the site, with the deposit subject to a maximum of $50 million;

* to require the formal agreement with deposit to be submitted together with the initial application to trigger a site (thus achieving a saving of two weeks);

* to shorten the period of public notice from three weeks to two; and,

* to announce, on a monthly and site-specific basis, the number of unsuccessful applications on the department's website.

"The objectives of introducing these measures are to improve the transparency and efficiency of the application list system. We hope the measures would speed up the triggering-to-sale process," Mr Lau said.

Under the system, developers interested in any sites on the list can submit an application to the Government for consideration. The applicant must offer a minimum price to purchase the site and pay a deposit.

If the price offered is in line with Government's assessment of the open market value, the site will be put up for sale by open tender or auction.

The system is market driven. It enables the market to determine flexibly the quantity and timing of land to be put up for sale, while the government will realise optimum proceeds through competitive bidding which will reflect the most optimal use of the sites and open market value of the sites, Mr Lau said.

Price disclosure not feasible

On the suggestion of disclosing the minimum prices for sites in the list, Mr Lau said it would not be feasible for the government to constantly evaluate and update the prices as they change frequently. Such a move would result in a government-driven, not a market-driven, system, he said.

He added the department will not consider disclosing unsuccessful applicants' offers as that would lead to unnecessary speculation on land prices.

Mr Lau stressed the minimum price will be set close to market price, as the government will not push up the land price, nor put a piece of land for sale at an unreasonably low price.

To maintain consistency, the government will not revert to the practice of regular land sales, he added.