Despite last year's lower starts, analysts said the commencement of more than 30,000 units remained a large amount which would ensure an abundant supply of flats for the next couple of years.

Analysts said housing starts might drop this year because of the decrease in land sales and premium settlements.

The trend towards small residential flats is intensifying in what is viewed as a move to meet demand from price-sensitive buyers and those with smaller budgets.

Government data shows 74.8 per cent of units in private-housing projects granted permits to commence last year came in the category of smallest unit-size - below 430 square feet in saleable area.

Assuming an efficiency ratio of 80 per cent, a flat of 430 sq ft saleable area should be about 540 sq ft to 600 sq ft in gross floor area - the quoted area for prices.

According to the Hong Kong Monthly Digest of Statistics, 23,452 units in the smallest category were approved last year. The 74.8 per cent ratio compared with 60.9 per cent of total starts in 1999, 56.8 per cent for 1998, 55.7 per cent for 1997 and 33.9 per cent for 1996.

Estate agents said it would be more difficult to sell larger flats as fewer families were interested in upgrading. With the Government boosting its loan schemes to encourage first-home buyers to enter the market, it was better to build lower-end flats.

Government figures show private-housing starts for units measuring 430 sq ft to 752 sq ft reached 5,392 last year, accounting for 17.2 per cent of the total.

This compared with 14,451 units or 32.6 per cent of the total for 1999, 11,303 units or 33.4 per cent for 1998 and 14,182 or 34.6 per cent in 1997.

Consents for larger flats represented 8 per cent of last year's starts.

There were 818 starts on units measuring 753 sq ft to 1,075 sq ft, down from 1,001 in 1999, 1,087 in 1998 and 2,154 in 1997.

The 258 starts for units of 1,076 sq ft to 1,721 sq ft was down on the 361 in 1999, 687 in 1998 and 279 in 1997.

Starts of units measuring 1,722 sq ft and above were 1,446, against 1,520 in 1999, 1,548 in 1998 and 1,534 in 1997.

Geographically, there were 2,283 units on Hong Kong Island among the housing starts and 7,983 units on Kowloon side. About 67 per cent, or 21,100 units, were in the New Territories, including Tsuen Wan and Sha Tin.

There were 25,150 private flats completed last year, compared with 31,504 in 1999, 19,489 in 1998 and 15,886 in 1997.

The saleable area of about 55.8 per cent of the total completions, or 14,040 units, was less than 430 sq ft. There were 8,581 completions of units measuring 430 sq ft to 752 sq ft, accounting for 34.1 per cent of the total.

There were 1,102 units of 753 sq ft to 1,075 sq ft completed, 278 units of 1,076 sq ft to 1,721 sq ft and 1,149 units of 1,722 sq ft and above completed.