Question of supply
Some projects are near completion, but the number of homes to be released is unknown.
If there is one thing most experts agree on, it is the need to increase the supply of homes.
The government target for next year is 20,000 units in the private sector, and 15,000 in the public sector, according to Paul Chan Mo-po, Secretary for Development, who is responsible for land supply policy.
Property experts estimate that there will be a potential supply of slightly more than 20,000 private sector flats in the pipeline for the new year, based on developers' construction schedules. However, the final number of flats to be released for primary sales will depend on market conditions, as project launches may be delayed amid uncertainty.
The supply of large flats, especially those in the traditionally lavish districts of Hong Kong Island, will be significantly less than small- and medium-sized ones, which may cause the luxury sector to outperform the mass market.
According to Midland Realty, more than 40 new residential projects under construction may be launched by developers in the new year, involving a total of 20,221 units.
The New Territories will contribute the largest supply with 15,300 units in 20 projects. Hong Kong Island will provide the least, with only nine small-scale new projects involving 2,365 units.
In Kowloon, 13 new projects, mostly small in scale, could be released by developers, providing a total of 2,556 units. Major developers also have a stock of several thousand units in previously launched projects.
Market sentiment has turned sluggish after the government's cooling measures. A stand-off between buyers and sellers has left prices in limbo amid heightened policy risks.
Analysts expect new residential projects to sell at more reasonable prices next year, therefore carrying a smaller premium over the secondary market rates in the coming months.
Buggle Lau Ka-fai, chief analyst at Midland Realty, says the potential supply figures are mere projections and the actual number of new flats to be launched by developers could vary as a result of their respective marketing strategies and market changes
"It is difficult to predict where the market may go, given the prevailing uncertainties. With the recent property cooling measures, developers will revisit their sales and marketing plans. That does not mean they will necessarily slow down their sales programmes," he says.
"The long-term supply of new flats is on the rise as a result of the government's continuous land sales initiatives. In the first three quarters of 2012, new housing starts were estimated at 16,000 units. With a gradual increase in new land and housing supply, developers should continue to launch their projects at a steady pace to generate proceeds."
By location, Yuen Long will probably see the largest supply, with about 4,800 private-sector flats involved in new projects to be marketed next year. About 2,600 new flats may be launched in Tai Po, while more than 2,000 units may be released in Tsuen Wan.
More than 1,600 new flats may be put on sale in Tseung Kwan O. New supply in Tung Chung and Lantau Island will be more than 1,500 units. New homes available in Tuen Mun will be about 950 units, while Fanling and Sheung Shui will have about 870 new units.
Cheung Kong (Holdings) is expected to be one of the biggest property seller for the year, with three main projects in the pipeline, involving more than 4,000 units. Sun Hung Kai Properties (SHKP) will have six new projects ready for presale, providing a total of about 4,300 units.
Nan Fung Development has more than 4,000 new flats, mainly in three major joint-venture projects with other developers in Pak Shek Kok, Tseung Kwan O and Tung Chung, that can be released for sale next year.
Another main source of supply will be New World Development, which has eight new projects coming on stream, providing more than 3,500 units. Sino Land could launch four new projects, involving about 2,800 units. Wheelock Properties' upcoming major project will be the 1,200-unit joint venture with New World Development and MTR Corp at Austin Road station and phase one will offer 576 units.
In terms of individual developments, Cheung Kong's project at Tsuen Wan West MTR station could offer more than 1,700 units, measuring from about 650 sq ft to 2,200 sq ft. Cheung Kong also has a 1,628-unit joint venture with Nan Fung for the LOHAS Park phase three development. Cheung Kong's Fung Yuen development near Ting Kok in Tai Po will provide a total of 1,356 units, ranging from about 600 sq ft to 2,400 sq ft.
Sun Hung Kai Properties will be launching the second phase of The Wings in Tseung Kwan O with about 780 units, while 25 blocks of low rise luxury apartments at The Riva in Yuen Long will offer about 800 units. Also in the pipeline is YOHO Town phase three, which could release more than 2,500 units.
New World could launch the 1,510-unit Park Signature in Yuen Long, while Nan Fung's 1,419-unit project in Tung Chung could go on sale next year.
Sino Land, Hopewell, and the Urban Renewal Authority's (URA) 1,299-unit joint venture in Lee Tung Street in Wan Chai, will be the biggest residential project on Hong Kong Island.
Phase four of Providence Bay in Pak Shek Kok, being jointly developed by Sino Land, Nan Fung, K. Wah Group and Wing Tai Properties, will provide more than 1,000 units.
Among other major new projects are New World and Henderson Land's Double Cove phase two with 865 units in Ma On Shan and SHKP's Century Gateway phase two with 849 units in Tuen Mun. Henderson Land also has two medium-scale projects on Boundary Street and Kowloon City. Hong Kong Ferry, a subsidiary of Henderson, has a 728-unit project in Fanling.
Smaller residential projects will dominate urban areas. Cheung Kong has two smaller developments in Yee Kuk Street in Sham Shui Po and Kwok Shui Road in Tsuen Wan, each providing about 400 units.
Among the new projects under construction in Kowloon, Sino Land is likely to market a 78-unit project at Hau Wong Road in Kowloon City and a 299-unit joint venture with the URA at Yuet Wah Street in Kwun Tong. Kowloon Development has a 100-unit project in Tai Kok Tsui coming up.
Kerry Properties may launch a 41-unit project in Ede Road in Kowloon Tong. Cheung Kong's Le Chateau, also in Kowloon Tong, will provide 31 luxury duplex units in the size of about 1,700 to more than 2,000 sq ft. Wing Tai's joint venture with Nan Fung on Ko Shan Road could be available at the latter part of 2013, providing about 150 units.
On Hong Kong Island, a project on Belcher's Street by SHKP could provide 200 units, while New World may release a 94-unit project at South Lane in Western District and a 152-unit project at Kwai Fong Street, Happy Valley for sale.
China Overseas Land and Investment's new project, The Nova in Sai Ying Pun, comprising 270 units, is expected to go on sale. Kerry Properties' new project at Hing Hon Road, near the University of Hong Kong, will provide 168 units. Hang Lung Properties has a luxury project at Blue Pool Road in Happy Valley that will provide 18 deluxe townhouses. Wheelock's boutique development at High Street, Mid-Levels West will provide 80 units.
In the ultraluxury market, Wheelock says the earliest presale for its joint venture with Nan Fung at Mount Nicholson Road could be the last quarter of next year. Depending on market conditions, luxury houses by SHKP at Twelve Peaks at The Peak, and Shouson Peak at Shouson Hill could also be launched. Swire's Opus Hong Kong, which set an Asian record for prices per square foot, is also on the market.
However, Simon Lo Wing-fai, executive director of research and advisory for Asia at Colliers International, says the luxury sector may continue to underperform the mass market. "Sales prices have to be reduced since there is an additional 15 per cent buyer's stamp duty," he says.
"Developers might provide sales sweeteners to their prospective buyers in order to boost volume. Individual developers might speed up their property launches to keep their cash cycles moving."
Despite the effects of the government measures, Victor Tin Sio-un (right), associate director of Sino Land, says the company still intends to launch projects next year. "The demand is still there," he says. "We expect the market will stabilise next year. We will shortly be selling The Graces, phase 3 of Providence Bay, and the joint venture at Lee Tung Street in Wan Chai," Tin adds that each marketing campaign will be planned according to the prevailing conditions.
Soundwell Holdings, a specialist in redeveloping urban areas into boutique luxury homes, will continue to market its projects such as Park Haven in Causeway Bay. "We are confident about the future property market, especially luxury projects in good locations. We believe prices will grow steadily," says Soundwell's executive director Vivian Chan.