Hong Kong's Northern Metropolis Project and the Debate Over Land Supply
As Hong Kong advances its ambitious Northern Metropolis development project, discussions among analysts highlight the need for a measured approach to land supply in order to support the ongoing recovery of the residential property market. This large-scale initiative, situated near the border with mainland China, continues to gain momentum as the government sets deadlines for land tenders in key areas.
The latest tender process involves several plots in the Hung Shui Kiu/Ha Tsuen New Development Area. These parcels include three residential sites and three enterprise and technology park sites, covering approximately 11 hectares. The development is expected to provide over 3,100 flats and around 280,000 square meters (3 million square feet) of industrial floor space.
Eric Tsang, acting head of valuation and advisory services at Colliers Hong Kong, noted that recent land tenders have already shown a more realistic pace of supply, which has helped stabilize prices and boost market confidence. "We believe land supply should remain measured, structured, and disciplined to maintain a steady and sustainable momentum of the residential market," he said.
Derek Chan Hoi-chiu, head of research at Ricacorp Properties, supports this view. He suggests that the government should continue its current strategy of "small steps, quick strides, and quarterly fine-tuning." According to him, maintaining the total potential supply of around 98,000 private housing units over the next five years while shifting focus toward the strategic layout of the Northern Metropolis will help stabilize market expectations and prevent short-term volatility in property prices.
The city's residential property market experienced a significant rebound last year, breaking a three-year slump. Home sales reached a four-year high of 62,832, according to the Land Registry. Second-hand home prices also increased by 3.63% in 2025, as reported by the Rating and Valuation Department (RVD).
This recovery has continued into the early months of 2026. New-home sales were on track to reach 12,000 for the first half of the year, approaching levels seen in 2019, according to Midland Realty. However, the supply of new homes is expected to slow in the coming years. Developers completed 18,448 private homes in 2025, a 24% decrease compared to the previous year. The number is projected to decline further to 16,975 this year and 15,362 in 2027.
Some analysts, however, question whether the nine residential plots set to be tendered this financial year—capable of accommodating an estimated 6,650 flats—will be sufficient to meet rising demand. Reeves Yan, executive director and head of capital markets at CBRE Hong Kong, believes the government may release more residential land to match market demand and increase revenue from land sales.
Yan and his team were involved in the sale of No 1 North Point Terrace to the Chinachem Group in June, which marked the largest private residential redevelopment site sale in Hong Kong year-to-date in 2026. This transaction underscores renewed momentum and confidence in the city's residential property market, according to CBRE.
Key Points in the Debate
- Analysts emphasize the importance of a measured approach to land supply to sustain the property market recovery.
- The Northern Metropolis project is a major focus, with developers and officials discussing the need for strategic planning.
- Recent trends show a positive shift in the property market, but challenges remain regarding future supply.
- Some experts suggest that increasing land supply could help meet growing demand and boost government revenue.
- The success of recent land sales highlights renewed confidence in the market.
As Hong Kong navigates these developments, the balance between supply and demand will play a crucial role in shaping the future of its property market.
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