HONG KONG: Hong Kong’s latest ambitious policies to increase land supply are unlikely to make a dent in the city’s home prices for now.

       That’s the conclusion of analysts after chief executive Carrie Lam on Wednesday proposed a slew of measures to boost the number of homes in the world’s most expensive residential market.

       They include an aggressive target to turn the remote northern part of the city into a “metropolis” for 2.5 million people – a project that’s likely to take decades to come to fruition.

       “It isn’t something that can happen instantly,” said Patrick Wong, a property analyst with Bloomberg Intelligence.

       He estimates Hong Kong’s home values will rise between 5% and 10% this year.

       In the last annual policy address of her current term, Lam announced plans to transform the northern part of the New Territories – relatively underdeveloped compared with Hong Kong Island and Kowloon – into the next residential and commercial hub spanning 300 sq km.

       That’s 27% of Hong Kong’s total area and about two-fifths the size of New York City.

       Lam has faced growing pressure from China to address Hong Kong’s housing shortage, which Beijing blames for the discontent that led to widespread anti-government protests in 2019.

       Her planned project in the northern area bordering Guangdong province is also intended to deepen ties with the mainland.

       The government will identify more land plots in the north to provide as many as 186,000 additional homes, taking the total to 926,000 including existing properties and those already planned, Lam said.

       While she didn’t give a definite time frame, she said the metropolis “is the most vibrant area where urban development and major population growth of Hong Kong in the next 20 years will take place.”

       “Major Hong Kong developers could boost new-home sales as the city leader’s annual policy address avoided property cooling curbs, which could support demand and new home-price highs.

       “However, potential projects from new land supply in the so-called northern metropolis announced by Lam may take at least a decade to fully execute,” said Bloomberg Intelligence real estate analyst Patrick Wong.

       In a bid to tackle excessive red tape, Lam also proposed initiatives to streamline the development process, obtain land from indigenous villagers and make redevelopment of old buildings easier for developers.

       “The policy address focuses on the medium to long-term planning,” said Willy Liu, chief executive of Ricacorp Properties Ltd, a realtor. — Bloomberg