The Hong Kong government started developing new towns in the 1950s to accommodate Hong Kong's booming population. During the first phase of development, the newly developed towns were called "satellite towns", a concept borrowed from the United Kingdom, of which Hong Kong was a colony. Kwun Tong, located in eastern Kowloon, and Tsuen Wan, located in the south-west of the New Territories, were designated as the first satellite towns, when the urban area in Hong Kong was still relatively small, restricted to the central and western parts of Kowloon Peninsula and the northern side of Hong Kong Island. Wah Fu Estate was also built in a remote corner on the southern side of Hong Kong Island, with similar concepts but at a smaller scale.
Plans to develop new areas were continued in the late 1960s and 1970s, when the name “new town” was officially adopted. As most flat lands in Hong Kong Island and Kowloon had already been developed, the government proposed to build new towns in the New Territories, a largely rural area at that time. The first phase of new-town development, which began in 1973, included Tsuen Wan, Sha Tin and Tuen Mun. With the success of these new towns, and the experience gained from building them, the government launched further stages of new-town development in subsequent decades. To date, nine new towns have been built, and about half of the Hong Kong population lives in these newly developed areas. After the government had built a new town on Lantau Island in the 1990s, the pace at which it developed new towns slowed in the 2000s, owing to lower population growth. As demand rose in the housing market and it became difficult for residents to buy new homes, the Hong Kong government suggested that new towns be built again in the 2010s, hoping thereby to increase the supply in the private housing market and provide more flats for public housing. For example, Hung Shui Kiu New Town, Kwu Tung North New Town and North Fanling New Town have been proposed by the government and currently under public consultation.
Land use is carefully planned in new towns, and development sets aside plenty of room for public housing projects. Highways, tunnels, bridges and railways have been built for accessibility. The first few new towns, such as Tuen Mun, Sha Tin, Yuen Long and Tai Po, were intended to be self-reliant, each having not only residential areas but also commercial, industrial and recreational areas, such that residents would not need to travel between the new towns and the city centre for work and leisure. To this end, a few industrial estates, such as Tai Po Industrial Estate and Yuen Long Industrial Estate, were built to provide work opportunities for the residents in the nearby new towns. Although the government successfully turned most of the new towns's town centres into vibrant commercial and cultural centres in their areas, the overall objective of self-reliance for the new towns failed, since most residents still had their jobs in Hong Kong Island and Kowloon; the objective became impossible to accomplish when most of Hong Kong's secondary sector industries had moved to China.