All land within the HKSAR is state property, and the Government is responsible for its disposal and management. Government land identified as being suitable for private development may be sold by public auction or tender. Land is also made available by private treaty grant at nominal land premium to non-profit-making educational, medical and charitable institutions for operating schools, hospitals and social welfare and other community facilities. Land grants at full market value premium are made to public utility companies for their installations.

    New government land leases are normally granted at premium for 50 years from the date of grant and subject to an annual rent equivalent to three per cent of the rateable value of the property at the date of grant, adjusted in step with any changes in the rateable value thereafter.

    On March 4, the Lands Department announced a one-year Land Sale Programme (for 2002–03) and a four-year Land Development Programme (for 2003–04/2006–07), which covered land for private residential and non-residential development in a five-year period. The Land Sale Programme comprised a detailed programme for scheduled public land auctions/tenders and an Application List. The Application List system, introduced in April 1999, provides flexibility in allowing the market to determine the amount of additional land required to meet market demand.

    During the year, 10 sites for private residential development with a total area of 6.42 hectares were sold by public auction. Other major land grants included a 32.68-hectare site at Area 86 in Tseung Kwan O for the construction of a depot by the MTR Corporation Limited.

    On November 13, the Government announced a package of measures to stabilise the property market, including: stopping all scheduled land auctions, calling off the two remaining land auctions in the financial year and suspending the Application List system until the end of 2003. Thereafter, the supply of new land will only be triggered from the Application List. The aim is to restore public confidence in the property market.

    In addition to land supply from the Government, the existing privately held land leases can be amended, normally at premium, on lease-holders' initiatives to provide for a more intensive or different type of development in accordance with the prevailing planning intentions. These amendments are effected by either lease modification or land exchange. During the year, 173 such transactions were concluded, involving a total of 197.73 hectares.