Why the Northern Metropolis development strategy won’t lead to a fall in Hong Kong home prices

The Northern Metropolis, covering an area of 30,000 hectares, envisions some 926,000 residential units accommodating a population of about 2.5 million

The Northern Metropolis development strategy is expected to take 15 to 20 years to be fully completed

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A general view of the northern area of the New Territories from Kwun Tung. Carrie Lam’s policy address proposed to turn the northern New Territories into an engine of growth and home to 2.5 million people. Photo: Martin Chan

Martin Wong Shiu-kei

Martin Wong Shiu-kei, director and head of research and consultancy of Greater China at Knight Frank.

Published: 12:00pm, 22 Feb 2022

The Northern Metropolis Development Strategy was introduced by Chief Executive Carrie Lam Cheng Yuet-ngor in her Policy Address last year. The Northern Metropolis covers a few mature new towns, as well as some new development areas, including Kwu Tung North, Hung Shui Kiu, San Tin, Lok Ma Chau and Man Kam To, with a total area of about 30,000 hectares.

The Northern Metropolis, when fully developed, is expected to have up to 926,000 residential units, accommodating a population of about 2.5 million.

There are different views on the Northern Metropolis. Prospective buyers with enough savings for a down payment worry that property prices will drop, owing to the enormous projected future supply, and are hesitant about climbing on the property ladder now. University students who have just submitted an application for public rental housing expect to be allocated a public housing unit in the Northern Metropolis immediately after graduation. And existing property owners wonder if they should cash in while property prices are still on the high side.

The question for prospective buyers is why are they considering climbing on the property ladder even when the property prices have been hovering at a historical peak level? Is it because the current low-interest-rate environment prompts them to think that owning a flat will lead to more long-term savings?