Hong Kong Can Thank Property Market for $17.6 Billion SurplusBy
Hong Kong just unveiled a hefty HK$138 billion ($17.6 billion) budget surplus. It can thank the booming property market for much of that.
In the fiscal year ending March, 27 percent of Hong Kong’s revenue came largely from the sale of land, compared with 17.7 percent in the period ended 2015, as the price of property has been steadily bid up by local developers and their mainland counterparts.
While the fiscal purse also earns so-called land premiums from developers who pay to convert private land to other uses, the lion’s share comes from public auctions of government land.
It’s a double-edged sword. Higher land prices mean more money for the government coffers, but it also pushes up the price of housing in what is already the world’s least affordable housing market.
In their quest to increase the supply of homes, Hong Kong’s leaders are exploring new ways to unlock land for residential use, such as country parks, farmland and golf courses. Residential use accounted for just 6.9 percent of Hong Kong’s roughly 111,100 hectares (274,500 acres) of land in 2016, the most recent figures available from the city’s Lands Department.