Prices set to fall as host of new units hit market

Hong Kong's housing market faces a key test of price sustainability and the strength of demand as a flood of new units are set to be launched by developers.

More than 4,000 units for which presale consents have been granted are now primed for sale. In addition, a significant number of projects are awaiting presale consents, which could add a further 3,000 units to the supply pipeline.

"A falling trend in prices can now be expected," said Simon Lo Wing-fai, an executive director at property consultancy Colliers International.

But how steeply prices fall will depend on developers' pricing strategy and the strength of demand, he added. The latest Centa-City Leading Index maintained by estate agency Centaline showed prices rose 0.64 per cent week-on-week to an index level of 118.31 last week, although that left prices down by 0.6 per cent so far this year.

The first test of demand will come with the launch of a second batch of apartments at the Riva development by Sun Hung Kai Properties.

The city's second-largest developer by market value has released a price list for 152 units to be released at its residential project in Yuen Long at prices that were up to 15 per cent below the current prices in the area.

Units on offer were priced at HK$7,583 and HK$10,884 per sq ft, compared with a recent transaction price of HK$9,216 per sq ft at the one-year-old One Regent Place in the area.