RESIDENTIAL PROPERTY | Tim Charlton, Hong Kong

4,800 private flats completed in Q2

About 93,000 flats will be available in the next three to four years.

A total of 4,800 private housing units were completed in Q2 and another 1,700 are under construction, according to data from the Transport and Housing Bureau, as Hong Kong works overtime to ease its chronic housing shortage.

“There were only 4,800 private housing flats completed in the second quarter. This appears to be low for two consecutive quarters although the resultant completion is expected to catch up in the forthcoming quarters,” said Cliff Tse, senior director of valuation advisory services at JLL. “We believe [that] around 20,000 flats would be completed in 2019 as about 25,500 units commenced construction works in 2016. The new supply for this year is anticipated to be in line with that of last year.”

The bureau estimates that about 93,000 private flats will be available in the next three to four years. Currently, 53,000 units are being built whilst 30,000 additional flats from developments are expected to start construction at any time.

Also read: Private home supply for 2019 falls 39% to 15,540 units

Meanwhile, 10,000 units remained unsold by the end of June, 2,700 of which were from projects completed in the second quarter.

Tse said that the lower number of unsold units from completed projects in Q2 may be a sign that developers are ramping up sales to avoid the government’s proposed levies on vacant units.

“Although it [vacancy tax] is yet to be passed by the Legco, developers are expected to be more sensitive to the market sentiment in order to adjust the construction progress. They might slow down the construction work of their new projects if market sentiment and outlook are not optimistic. Slowdown of construction could mitigate the burden of paying Special Rates if they forecast difficulties of selling new units,” Che noted.

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