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Land Expansion Is Difficult and Potential Private Properties Have No Increase in Six Quarters.

Image Caption
2019-10-26-(Sat)
【28Hse.com】  
The completion property number of this year will be difficult to reach the target since it has been only half of the full-year prediction in the first three quarters.

Hong Kong Wen Wei Po (By Ngan Lun-lok)

In the face of high property prices and difficulties in first housing, according to Hong Kong potential first-hand private property supply data in the third quarter, the supply of first-hand private housing in the next three to four years will not increase for the sixth consecutive quarter, maintaining the level of 93,000 units; In the first three quarters, the properties under construction and completion will fall by11.59% and 19.05% respectively, with the latter will only be a half of the full-year target. The industry points out that, the above situation reflects that the Government has encountered great difficulties in expanding the land, and the hope of increasing land supply in the future is placed on the recycling of land and land sharing, while both of them need to be carried out for several years,so it is expected that the potential first-hand property supply will reach the peak in the short term, then there will be a downward trend in the future, or even a gap will appear after three years.

Transport and Housing Bureau yesterday announced Hong Kong's potential first-hand private property supply data in this third quarter, that the supply for the next three to four years will be 93,000 units, and it will maintain for six consecutive quarters. As for the private residential property under construction, it was 10,500 units, sharply rose by nearly 5.2 times quarter-to-quarter and hit a new high in the 14th season (ie, three and a half years). It is believed to be driven by large-scale projects. As the property under construction sharply increased quarter by quarter, the number of unsold property under construction increased from 53,000 units in the second quarter to 60,000 units in the third quarter, an increase up to 13.2%.

The property under construction has fallen 11.5% yearly in the first three quarters.

However, it is worth noting that the properties under construction in the first two quarters of this year were only 4,000 units, and even though it rebounded sharply in the last quarter, but it only replenished the gap of earlier. In fact, the property under construction in the first three quarters has been only 14,500 units, which is still 11.59% less than the 16,400 units in the first three quarters of last year. As for the completed property, the number was also low. In the third quarter, 4,400 units were recorded, down 8.3% from the 4,800 in the second quarter. In the first three quarters, only about 10,200 units were completed, and it was down 19.05% from 12,600 units in the same period last year also was only about half of 20,415 units predicted by the Government for a full year, so it is expected that the possibility of achieving the target will be small.

The Senior Manager of Midland Real Estate Data and Research Center, Cheong Pui-lui pointed out that, the above situation reflects the difficulty of the government to search land, and the newly Policy Address mentions the land sharing pilot scheme which will undoubtedly help to increase the supply of public and private housing also will be faster than land reclamation. However, the scheme will collect applications as soon as early next year, plus it will take time to develop the land, so it is difficult to supply in the short-term.

The property from land that is ready for development falls 7000 units quarter-by-quarter.

Furthermore, at the end of last year, the government announced that the proportion of public and private housing in the next 10 years will be adjusted to 7:3, then in this year the private land supply target is reduced from the original 18,000 units to 13,500 units, a reduction of 25%, so it is foreseeable that the new supply will reach the peak in the following three to four years. As for the existing stock property, it is 10,000 units, which is flat on a quarterly basis, indicating that developers are actively selling the stock properties to avoid vacant tax. The property from land that is ready for development decreased by 23.3% from 30,000 units in the second quarter to 23,000 in the third quarter, and the private land available for development has a downward trend.

In the analysis, there is a worry about the supply gap after 3 years.

The Research Department Director of Ricacorp Properties, Chen Hoi-chiu also expresses, the potential supply of private houses in the third quarter remained at 93,000 units, which was relatively stable, while the future policy of the authorities is to increase the supply of public housing, so if the land for private housing is not filled up in time, then the impact will be obvious after three years also the situation of private housing supply gap will gradually emerge.

The executive director and director of the valuation and consulting department of the Knight Frank, Lam Ho-man also shares the view that the residential supply is still sufficient in the next three years, but supply after 2023 is a problem. He continues that, due to the unstable market conditions in recent months, it is estimated that in the future developers will build and sell properties according to the market condition and the speed of sales, while the property sale slows down recently, so it is estimated that developers will not rush to build houses.

A spokesman for the Transport and Housing Bureau adds that an estimated 73,700 units among the potential supply of 93,000 units are small and medium-sized units less than 753 sq ft, and the number accounts for 79% of the total supply, the same rate as the previous quarter. In the next few months, six residential sites will be ready for development, providing about 5,200 units. The Bureau believes that the expected supply of private homes will remain at a relatively high level in the future.
Translated by 28Hse.com . All right reserved.