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1.2.1 An increase in market competition

It is found that there is a significant increase of market participants.
In the period from 2009 to 2015, the share of the total residential GFA suc-
cessfully sold or tendered to the three largest participants decreased from
about 70% to 90% to about 50% (Figure 5).

In the period concerned, the government has implemented a
number of policy measures to reinforce its control over the supply of private
residential first-hand properties, including the “dual track system” in 2010/11
under which regular land sales and the "Application List System" concur-
rently existed. Subsequently, the government in 2013/14 announced the
abolishment of the "Application List System". The government has also re-
cently preferred to use tendering (instead of auction) to execute land sales,
as well as providing more small- to medium-sized sites with a view to en-
couraging new and smaller developers into the market. An increase in the
number of market participants in the past six years should have produced
a positive effect in the forms of enhanced market competition and market
efficiency, hopefully creating more incentives for developers to speed up
housing production and sales.

Figure 5. The share of the largest three participants in the land auction / tender market

Note : Only include residential sites.
Source: Our Hong Kong Foundation.

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