Peak in flats vacancies to pressure rental returns

Large numbers of completed but unoccupied flats are forecast to push vacancy rates in the mass residential market close to decade highs.

Midland Realty is projecting a vacancy rate by the end of the year of 4.7 per cent, up from 4.5 per cent, or 40,000 to 50,000 units.

Midland Realty senior research officer Gordon Tse Tsz-man said Hong Kong had seen vacancy levels this high only once before in this decade, in 1994.

Based on Government figures, Midland Realty said developers would complete about 36,000 units this year with take-up estimated at only 25,000 to 30,000 flats.

Vacancy rates in popular housing estates could climb from 4.5 per cent to 4.7 per cent by the end of the year, he said.

The Government includes in its vacancy statistics all flats which have secured an occupation permit.