Projected Hong Kong private home supply raised to record 78,000
Government accelerates land sales as number of flats under construction slides 75 per cent
The projected supply of private homes in Hong Kong has been raised to a record high of 78,000 for the coming three to four years as the government accelerates land sales.
Analysts said an increased annual supply had become a trend, but one that was unlikely to stem rising home prices in the short term.
The Transport and Housing Bureau announced the official figures in a report on new private housing supply for the first quarter of the year.
Some 78,000 new homes are projected to be put on the market over the next three to four years, an increase of 4,000 flats from the estimate made in the bureau's previous quarterly report.
Meanwhile, the number of flats under construction in the first quarter of the year fell 75 per cent to 2,000 from the 8,000 reported in the first quarter of last year. The number of flat completions fell to 200, from 2,900 flats in the same period last year.
Property consultants put the declines in first-quarter flats under construction and flat completions down to differences in developers' construction schedules. They say supply will increase significantly in the second half of the year because the government has been increasing land supply.
"The number of 78,000 flats is a record-high projection, driven by an increase in land sales by the government in the first quarter," said Cliff Tse, national director of valuation advisory services at property consultant JLL.
The bureau's latest report says "units from disposed sites where construction may start any time" increased to 21,000 in the first quarter, an increase of 6,000 units from December.
The projection of 78,000 homes includes 61,000 units under construction but excludes those presold by developers.
In the first quarter of this year, developers presold 10,000 flats, up from 7,000 in the previous quarter.
Tse said the revised home supply projection would not result in an immediate correction in home prices.
The total of 78,000 units represented supply of between 19,500 and 26,000 flats a year, Tse said, which is comparable with the average home supply of 25,000 units a year in the 1990s.
Thomas Lam, the head of valuation and consultancy at Knight Frank, said the news would not affect home prices.
"In the short term, home seekers won't feel the threat as the increased supply has not yet come," he said.
But Wong Leung-sing, an associate director of research at Centaline Property Agency, said the market would gradually see a balance between demand and supply.
"The city's housing market has entered a new trend," Wong said. "Home supply will be sustainably increased to meet demand and developers will accelerate property launches to reap cash for new site acquisitions."
Centaline estimates that 17,703 flats will be completed next year, with 28 per cent of them already presold by developers.
The latest Centa-City leading index, issued yesterday by Centaline and which monitors home prices in the secondary market, dropped 1.1 per cent week on week to 140.04, slightly below the market peak of 142.36 recorded in the week to April 5.
