Hong Kong’s supply of new homes hits record high amid buyer reluctance

A government estimate of Hong Kong’s supply of new private homes has increased to 107,000 units, the highest level since the forecast started in 2004

Analysts said the estimate is not likely to equate to actual home completions as developers delay launches and slow construction to weather the downturn

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People check out residential property advertisements in the window of a real estate agency in North Point, Hong Kong, on October 29, 2023. Photo: May Tse

Published: 8:15pm, 30 Oct 2023

A government estimate of Hong Kong’s supply of new private homes has increased to a record high of 107,000 units as buyers remain hesitant amid high interest rates.

The number of first-hand private residential units that may be available in the next three to four years increased by 2,000 as of the end of September, compared with an estimate of 105,000 issued at the end of June, the Housing Bureau said on Monday.

The potential supply has increased by 12,000 units year on year as the economic climate and the high cost of borrowing have deterred buyers. The total of 107,000 matches the estimate at the end of the first quarter, which was the highest level since the forecast began in 2004, said Buggle Lau Ka-fai, chief strategist at Midland Realty.

“The market sentiment was quiet due to interest rate hikes and increases in borrowing costs,” he said. “The market was also waiting for relaxation on property curbs before [Chief Executive John Lee Ka-chiu’s] policy address, thus new home sales slowed down.”

Construction workers labour on a residential building in Kong Kong’s Kai Tak area on October 17, 2023. Photo: Yik Yeung-man

In the third quarter, developers completed 2,500 units, 3.1 times the total in the second quarter, bringing the tally for the first nine months to 10,100 units.