Home-buyers can expect a growing number of new residential projects to go on pre-sale this year as housing supply is likely to pick up from last year's low, analysts say. Despite fears of a housing supply shortage, some analysts predict there will be stockpiles of unfinished flats ready for pre-sale. Earlier, government figures had estimated that the number of completed new flats for last year would be 19,000, which was a low point of recent years. It also forecast that the supply of completed flats for this year would rise to about 26,800, while analysts projected that supply for 1998 and beyond would increase further. Developers usually release unfinished units for sale several months, or up to one year, ahead of completion, as allowed under the Government's consent control system. A rise in supply next year means that more new projects, due for completion in 1998, are likely to be offered for pre-sale by developers this year. With the buying frenzy in the residential sector continuing, analysts expect developers to offer more projects for sale in the short term, taking advantage of the favourable sentiment. Shih Wing-ching, managing director of Centaline Property Agency, said that developers would speed up the construction progress of existing projects so as to release them for sale earlier now that the market sentiment was good. In view of the long process to obtain pre-sale consent from the Government, he expected the market to see more new projects coming up for sale in the second half of the year. However, Mr Shih said the increase in supply would not be too significant and it would not compensate for the shortfall in new flats completed in the last two years. New supply was unlikely to reach the level of 35,000 units a year in 1998 and demand would continue to outstrip supply as the population increased, he said. According to Centaline's estimates, there were about 23,000 transactions for new or unfinished flats in the private sector last year, of which about 70 per cent were provided by nine major developers. Leading the string of new projects coming on stream this year are Eton Properties' Carmen's Garden sale today and Sun Hung Kai Properties' (SHKP) massive East Point City. Other major projects expected to go on sale soon include The Panorama, a joint project by Lai Sun Development and South China Group, and the phase-one development of Laguna Verde, a joint venture between Cheung Kong (Holdings) and China Light & Power. SHKP, Cheung Kong, Henderson Land Development and Sino Land are expected to be among the biggest suppliers of residential properties again this year. Mr Shih said that there was hectic speculation in the luxury residential market and it appeared to be spreading to the mass sector. Despite the Government's pledge to increase land supply for residential development, he said that it was difficult to do so with the time-consuming procedures involving different departments to win approval for a project. He said that an overall relaxation in plot ratios and increase in the density of developments would be a more effective way of solving the territory's housing supply shortage. But some analysts were more confident about housing supply in the long term. They said the availability of subsidised housing flats under the Home Ownership Scheme for sale in the secondary market would add to the residential stock. One analyst said the overall supply might not be as limited as had been expected in longer term, but new flats in urban areas would continue to be sought after because the bulk of new supply would be in the New Territories. With high prices being charged for new flats, he said buyers often needed to pay a premium in purchase. He suggested that it might be better to rent a property in view of the low rental rates.
