Land Sales in Turmoil as Hong Kong Introduces Controversial Security Law
The Hong Kong Lands Department has updated its land sale and short-term lease tender documents to include national security clauses, according to a report by the Hong Kong Economic Times. This means that the government now has the power to reject bids and suspend short-term leases due to national security concerns.
The Development Bureau confirmed the report, stating that safeguarding national security is a responsibility shared by the whole of Hong Kong society. The inclusion of these clauses caused Hong Kong property stocks to plummet, with some experts predicting that developers will be more cautious when bidding for land sales. In January, all four tenders for a residential site in Stanley were rejected due to failing to meet the government’s reserve price.
The land administration bureau reported that despite the inclusion of certain terms, the first land sale project in the Kai Tak area garnered interest from six bidders and was successfully sold by the end of 2022. The bureau, responsible for infrastructure development, urban planning, and renewal, believes that the relevant terms should not deter law-abiding bidders and will not hinder the government’s land acquisition efforts.
In 2022, there was a 15.6% decline in private housing prices in Hong Kong, which is recognized as one of the world’s most unaffordable areas, marking the first annual drop since 2008. The National Security Law, which was enforced by Beijing in 2020 and includes penalties such as life imprisonment for subversion, conspiracy with foreign forces, and terrorism, has been censured by human rights organizations and Western governments for undermining freedoms and the legal system. Chinese and Hong Kong authorities, on the other hand, maintain that the law is necessary to re-establish stability after the 2019 anti-government demonstrations.