A think tank on Wednesday warned that increasing compensation rates for rural landlords might encourage them to hoard more agricultural plots and lead to more serious land speculation.

Chan Kim-ching from Liber Research Community was commenting on a new mechanism put in place by the government to seize private plots for building public housing and infrastructure.

Rural landlords are set to benefit from the scheme as they will receive HK$1,510 per square foot of plots taken for development, regardless of the location.

The government hopes the new mechanism will speed up land resumption and the development of the future Northern Metropolis.

But Chan said he doubts whether this goal can be achieved.

"Such a change will trigger a new chance for land speculation to buy cheaper land, especially for the land seemingly non-developable and then they could influence the government's land policy to change it into developable land and urge the government to do the land resumption," he said.

"It sets a very bad example to give way for the rural vested interests. It's a bad precedent for them to ask for more in future. The debate will go on and complicate the future land development."