Of the HK$3.5 billion loss for the 2022-23 financial year, HK$3 billion was due to the devaluation of some projects started in the past while the remaining HK$500 million was an operational deficit.

Authority managing director Wai Chi-sing warned that the situation could continue.

“The 10 coming projects in the next five years might generate a deficit of about HK$2 billion,” Wai said.

“We need to ask some fundamental questions, do we still agree to subsidise private owners to renovate and redevelop their old flats? Should we just rely on the revenues from selling redeveloped flats to pay for all these expenses?

“But we will not halt any projects as a result of the deficit.”

The authority, a statutory body set up in 2001 to push urban renewal projects in Hong Kong, last recorded a deficit – of HK$2.26 billion – back in 2013-14.

Under its policy, compensation, which is assessed by independent authority-appointed surveyors, is equivalent to the price of a comparable seven-year-old flat in the same district.