Here's what to expect from the 2014 Policy Address

Brace yourselves for some big news.

According to Barclays, Hong Kong will unveil the 2014 Policy Address on 15 January 2014.

With the current  administration having laid out its key policies and framework in its inaugural Policy Address last year, analysts do not expect any big change in policy direction or directives as it pertains to housing and land supply.

Here's more from Barclays:

We believe the overall direction will still be on: 1) increasing land supply; and 2) putting the needs of Hong Kong permanents residents first. Although our base-case view is for no change to the various Stamp Duties (ie, SSD, Buyer Stamp Duty [BSD] and Double Stamp Duty [DSD]), there is an outside possibility that the current threeyear applicable period of the SSD could be rolled back to the previous two-year holding period.

Given our expectation that there are unlikely to be any major housing policy changes from last year, in the following, we have highlighted some key policies from the 2013 Policy Address.

In the 2013 Policy Address, housing was the first of four problems cited in the introduction, together with poverty, ageing population and environmental issues.

We believe two key ideas behind the government’s policies could be found in the fourth and fifth paragraphs of the 2013 Policy Address: “With the wisdom and the will to make the right choices and decisions, and comprehensive and long-term planning for land use, we can provide a better living
and working environment for the people of Hong Kong. New business ventures and expansion will no longer be constrained by cost for premises....As long as the housing shortage persists, we have no alternative but to restrict external demand and curb speculative activities. Similarly, for other areas prone to shortages, I will put Hong Kong people first.”

After discussing Hong Kong’s economic development, the 2013 Policy Address then returned to the issue of “Housing and Land Supply”, which took up 42 paragraphs, accounting for 21% of the total 200 paragraphs of the policy address and putting it slightly longer than the “A Caring Society and a Home to the People” at 40 paragraphs. 

Having reviewed in detail the short-, medium- and long-term housing supply last year, we expect the 2014 Policy Address to report back on some of the goals and targets that were stated. Some of these include:

• Total supply of public rental housing (PRH) will be at least 100,000 units over the five years starting from 2018.

• Update on the progress of 1) the New Development Areas (NDA) in North East New Territories, Hung Shui Kiu, New Territories North; 2) the review of deserted agricultural land in North District and Yuen Long; 3) development of Lantau Island, (iv) reclamation outside Victoria Harbour; 4) rock cavern and underground space; 5) Kowloon East and Kai Tak; and 5) revitalisation of industrial buildings.