That's just a possible reason found to excuse the HK government really. There are so many unused flat land in HK if you look at the map or visit HK.
When there's a will there's a way. Unlike HK, Singapore is a fully-fledged city-state and we have to set aside land for national infrastructure/purposes. For example we have to set aside a significant portion of land for military camps/bases. There are 5 military airports in Singapore and the surrounding regions are restricted in height.
en.wikipedia.org
en.wikipedia.org
We also spend a quarter of our budget on the military, which HK doesn't have to worry about. Imagine a tiny country spending more on the military than Indonesia, has more fighter jets than Spain, and has as many tanks as Italy. It's a heavy weight to carry. And yet, HK still has to depend on land sales revenue while Singapore can exclude land sales revenue as per the Constitution.
National infrastructure also includes water recycling/desalination, oil storage, rail depots etc. Many of such services in HK are shared with the mainland.
Then we also have a significant share of manufacturing in our economy (>20%) and these activities are almost always more land-intensive than the service industry. OTOH HK's manufacturing share is virtually non-existent (<1%).
In addition, there are also 20 gold courses in Singapore as compared to 6 in HK.
HK's issue is not really due to a lack of land, so as many other countries/cities with high property prices.
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Does Australia, New Zealand and Canada lack land?
It's all about vested interest. Living in subdivided flats and even cages is an insult to the human dignity.
Btw Singapore even set and raised the average minimum flat size allowed by developers.
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Why would Singapore do that if land size is such a constraint? Is land size really the root of high property prices?