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Hong Kong Property Market Welcomes New Changes
Apr 3, 2024
Hong Kong Property Market Welcomes New Changes Hong Kong
By   Internet
  • City News
  • Hong Kong Property Market
  • Property Investment
  • Hong Kong Property
Abstract: The Lands Department's announcement of new land premium compensation standards will have far-reaching implications for the Hong Kong property market, affecting not only land development and real estate investment but also triggering market adjustments and reforms. This measure will promote the healthy development of the property market, inject new vitality into the Hong Kong property market, and bring forth more possibilities for future development.

The Lands Department's latest announcement of premium compensation standards for New Territories agricultural land and industrial land will bring new development trends to the Hong Kong property market. According to the latest data, the premium for non-residential development ranges from HK$1,486 to HK$2,230 per square foot, while the premium for conversion to residential development ranges from HK$2,369 to HK$3,159 per square foot, with the highest premium level in the Yuen Long city center.


This round of premium adjustments has expanded its scope, covering ten districts in Yuen Long, the Northern District, and Tuen Mun, including multiple areas around railway stations, as well as new towns and potential future development areas. The Lands Department stated that these new standards will be reviewed annually to adapt to changing market demand and development trends.


Meanwhile, the Lands Department has also updated the premium compensation standards for industrial land, calculated based on the pre-redevelopment market value. Premiums for industrial land in the Northern District of the New Territories start from HK$1,486 per square foot, while those in the Hong Kong Island District can go up to HK$2,880 per square foot. Premiums for special industrial land are calculated at 70% of the general industrial land.


Hong Kong Property Market Welcomes New Changes

Internet


It is worth noting that the value of residential land after premium compensation has been lowered more significantly compared to industrial land, with an overall reduction of 20%. After compensation, the value of commercial or modern industrial land ranges from HK$2,230 to HK$5,574 per square foot, while the value of residential land decreases by approximately 38%, with compensation levels ranging from HK$3,159 to HK$7,479 per square foot.


Especially for land planned for conversion from industrial to residential use, the reduction in compensation exceeds 40%. For example, in Kowloon East, assuming the floor area remains unchanged, the original compensation was HK$5,574 per square foot, but after the update, it has been reduced to HK$2,880 per square foot, representing a 48% decrease. This change may make "industrial to residential" projects more attractive.


This series of adjustments will have profound implications for different types of land use. With the adjustment of premium standards, it is expected to trigger a series of chain reactions in land development, real estate investment, and other fields. This also means that developers, investors, and homebuyers will need to reassess market conditions and investment plans to better seize market opportunities. At the same time, this will inject new vitality into the Hong Kong property market, promote the launch of more new real estate projects, provide more choices for residents, and help drive the healthy development of the property market.

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Hong Kong Property Market Welcomes New Changes
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