Hong Kong faces new-home glut in 2023 as more than 40,000 flats could hit the already shaky property market

119 new private housing projects with 40,291 units could be ready to launch this year, according to Ricacorp Properties

The nearly two-decade high in new supply could depress prices in the short term, especially in specific areas, analysts say

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Potential buyers at the sales office of Henderson Land-developed One Innovale at Mira Place, in Tsim Sha Tsui, on January 8, 2023. Photo: Edmond So

Published: 8:30am, 10 Jan 2023Updated: 12:54pm, 10 Jan 2023

Hong Kong property developers are putting the finishing touches on the biggest stockpile of new homes in nearly two decades, a potential glut that could weigh down prices in 2023 as the market tries to pick up steam following the worst year for new-home sales in nine years.

As many as 119 new private housing projects could be ready for launch this year, with a total of about 40,291 units, according to Ricacorp Properties.

The burgeoning inventory could weigh down prices, said Derek Chan, head of research at Ricacorp, adding that areas with the most new homes may see prices lag other districts by 2 per cent.

However, as long as the market stabilises, the impact will not be substantial, he said. “Previously locked-up buying power will return to the market to increase absorption, and developers will launch projects in an orderly manner in line with market conditions,” Chan said.

A residential building under construction in Hong Kong, with Lion Rock in the background, on October 11, 2022. Photo: Dickson Lee

The actual number of new homes to hit the market will depend on developers’ assessments of actual market conditions, and is likely to be closer to 20,000, according to Ricacorp.

That would still represent a large increase over 2022, when 27 developments with 12,030 units were launched, according to Centaline Property Agency.