Construction of private residential units has fallen to a record low, a sign tightening supply may help the property market ride out the impact of the worsening US subprime crisis. Transport and Housing Bureau figures released yesterday showed construction was started on 300 units in the first three months of the year, compared with 1,100 in the same period last year. That was the lowest since statistics began in 2004. The number of units available for sale, including unsold completed units and those under construction, dropped to 52,000 at the end of the first quarter from 55,000 at the end of last year. Hong Kong's property market, fuelled last year by a bullish stock market, has started to slow in tandem with real estate markets in the United States, Australia and Britain as one of the worst global financial turmoils in decades started to bite. Unsold property in completed projects dropped 10 per cent to 9,000 units from 10,000 at the end of last year. That was also lowest since 2004. About 1,000 private residential units were completed in the first quarter, down 56.52 per cent from 2,300 units in the same period last year. Centaline Properties expects only 9,600 units will be completed this year, a 36-year low as the supply of development sites dries up. Last year, 10,500 units were finished. Charles Chan Chiu-kwok, an executive director at Savills Valuation and Professional Services, said the tight supply was due to a lack of land being sold at government land auctions and railway operators providing limited large-scale development projects. Mr Chan said this could help stabilise property prices amid rising concerns the global economic slowdown would start to hit the city's real estate market. According to the Centa-City Leading Index, a gauge measuring average transaction prices in the secondary residential market, housing prices dropped 2.78 per cent from this year's peak between February 25 and March 9. 'It is hard to predict the outlook for the residential market in the next few months as the impact of the US subprime crisis on Hong Kong is still uncertain,' Mr Chan said. The impact of rising subprime mortgage defaults on property prices would become clearer after the Beijing Olympic Games in August. Mr Chan expected the tight supply of new flats would continue as developers became more conservative in bidding at land auctions this year. Wong Leung-shing, an associate director for research at Centaline Agency, said property prices would not drop significantly because of the tight supply. 'The outlook for the Singapore and Hong Kong property markets has been clouded by the subprime crisis,' Mr Wong said. 'But property prices in Hong Kong remain stable, while prices in Singapore began to drop last month.'