According to the latest announcement by the Hong Kong government, the supply of new private homes is projected to reach 107,000 over the next three to four years. This figure aligns with the government's target of providing a total of 440,000 homes for the next decade.
The Housing Bureau disclosed that the estimated supply of around 107,000 new private homes is based on data up to the end of September. This represents a quarterly increase of 2,000 homes and marks the fourth consecutive quarter with a supply surpassing 100,000 homes.
Among the total of 107,000 homes, approximately 68,000 are unsold presale units currently under construction. These figures have remained consistent on a quarterly basis but have shown an annual increase of 5,000 homes. Additionally, about 18,000 unsold homes are from completed projects, while there are approximately 20,000 homes from sites where construction may commence at any time. The latter reflects a quarterly increase of 1,000 homes.
In the third quarter, the construction volume reached 3,200 units, which represents a yearly growth of 1.3 times. However, there was a decline of 47 percent compared to the previous quarter.
Notably, the total construction activity for the first three quarters has already surpassed the entire annual figure of 11,000 homes from the previous year, reaching 11,500 homes.
During the same period, 2,500 new homes were completed in private projects, which is twice as many as the previous quarter. However, this figure is 44 percent lower when compared to the same period last year. In total, 10,100 homes have been completed in the first nine months of this year.
Vincent Cheung Kiu-cho, the managing director of Vincorn Consulting and Appraisal, suggests that it may take up to eight years to fully absorb the current potential supply of new homes. This could have implications for land acquisition strategies and bidding interests among developers.
Given the current relatively high land costs and the potential for further interest rate hikes in the United States, developers may consider adjusting their land acquisition prices to manage costs effectively.
Meanwhile, the government has forecasted an overall housing demand of 432,000 homes over the next 10 years and has set a supply target of 440,000 homes. Out of the total target, the Housing Bureau aims to provide 308,000 homes in public housing and 132,000 homes in private housing.
