More than 13,000 home supply units up for grabs in 4Q16

Where are the new home supply battlefields?

It is estimated that over 13,000 home supply units are available for launch in 4Q16, based on project completion timing (projects are eligible for pre-sale 36 months prior to completion).

According to a research note from Bank of America Merrill Lynch, in reality, the effective supply will depend on developers' own project launch timelines and timing of pre-sale consent approved by the government.

Where are the new home supply battlefields?

It is estimated that over 13,000 home supply units are available for launch in 4Q16, based on project completion timing (projects are eligible for pre-sale 36 months prior to completion).

The 13,000 units of saleable resources are concentrated in relatively few districts, such as Kai Tai (3,900 units) and Tsuen Wan (1,900 units). According to COLI's managing director Tony Yau, the developer's One Kai Tak Ph. 2, which offers 624 units, is expected to obtain pre-sale consent in October. Poly Property and K. Wah also plan to launch their Kai Tak projects by end-2016.

In Tsuen Wan, NWD/Vanke's Pavilia Bay (983 units) and CKP's TW5 Bayside Ph.1 (970 units) are both awaiting pre-sale approvals.

Here's more from Bank of America Merrill Lynch:

Since MTRC is involved in both projects, Bank of America Merill Lynch believes the timing of the launch will be well coordinated to prevent head-on competition between these two projects.

The market generally believes Pavilia Bay will first hit the market. Outside the Kai Tak and Tsuen Wan districts, SHKP named Ph. 2A of the residential project above Nam Cheong Station "Cullinan West" (1,050 units), which is another key new launch that investors should watch for.

Victor Lui, deputy managing director of SHKP, said the project is now applying for the pre-sale consent and he hopes it can be launched by end-2016.

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