Page 96 - ENGLISH_FullText

Another research conducted by international real estate consultancy
Savills in 2015 demonstrates that assuming all available brownfield sites
are developed in the UK, the development cost of up to 40% of the potential
homes to be built on the brownfield sites would be higher than the prevailing
market price, making these developments financially unviable. This reflects the
sometimes hefty costs of converting these brownfield sites into development-
ready sites before actual housing construction could be carried out.

And to make an arguably fairer comparison, Savills estimated that the
new homes to be built on brownfield sites in London (instead of the UK) would
cost an average HK$10,000 psf (adjusted as 2015 HK$), which is more or less the
market price of private residential property in Hong Kong (Figure 29).

Figure 29. Estimated housing capacity in brownfield sites in the United Kingdom, 2010

Source: 'Land for New Homes', Savills (August 2015).

Taking into account that Hong Kong has not seen any large-scale
land development projects for an extended period of time, land supply policy
must follow a multi-pronged approach. For example, in the short-term, the
government will rely on changing land use by rezoning sites near urban areas
or transportation networks to obtain developable land, before NDAs (covering
large areas of brownfield sites) could be delivered to meet housing demand in
the medium term. In the long-term, land reclamation and new town develop-
ment are, at any rate, important sources of land supply.

96