Supply of flats set to ease only slightly
Residential supply in Hong Kong will decrease modestly in the next three years but still be higher than the average annual completions in the past decade, according to the Rating and Valuation Department.
Last year, 34,040 private housing units were completed, the highest figure since 1999 when 35,320 units were completed.
Completions are expected to decrease to 30,500 units this year and 27,700 in both next year and 2005.
Over the 10-year period to 2001, average annual production was 25,800. The New Territories will provide the bulk of new supply in the next three years.
The department's estimates show 54 per cent of the completions this year will be in the New Territories and 37 per cent in Kowloon. Their respective contributions will be 41 per cent and 37 per cent next year and 64 per cent and 28 per cent in 2005.
Analysts generally expect prices in the New Territories will suffer more in the coming years due to the larger supply.
The abundant supply last year was unmatched by demand, which was adversely affected by the rise in unemployment, pay cuts or the freeze in salaries, according to the department.
Only 19,900 new flats were absorbed, which pushed the vacancy rate up to a record 6.8 per cent or 74,200 unoccupied units, at the end of last year. This compared with 5.7 per cent or 60,410 unoccupied units at the end of 2001.
In the breakdown of statistics, the vacancy rate of small- to medium-sized flats rose from 5.6 per cent to 6.6 per cent, with 66,690 unoccupied units. The vacancy rate of large flats jumped from 7.3 per cent to 9.3 per cent, with 7,510 unoccupied units. Yau Tsim Mong district had the largest number of vacant units at 9,313, mainly involving properties in West Kowloon reclamation and Tai Kok Tsui.
