Hong Kong's housing market faces a key test of price sustainability and the strength of demand as a flood of new units are set to be launched by developers. More than 4,000 units for which presale consents have been granted are now primed for sale. In addition, a significant number of projects are awaiting presale consents, which could add a further 3,000 units to the supply pipeline. "A falling trend in prices can now be expected," said Simon Lo Wing-fai, an executive director at property consultancy Colliers International. But how steeply prices fall will depend on developers' pricing strategy and the strength of demand, he added. The latest Centa-City Leading Index maintained by estate agency Centaline showed prices rose 0.64 per cent week-on-week to an index level of 118.31 last week, although that left prices down by 0.6 per cent so far this year. The first test of demand will come with the launch of a second batch of apartments at the Riva development by Sun Hung Kai Properties. The city's second-largest developer by market value has released a price list for 152 units to be released at its residential project in Yuen Long at prices that were up to 15 per cent below the current prices in the area. Units on offer were priced at HK$7,583 and HK$10,884 per sq ft, compared with a recent transaction price of HK$9,216 per sq ft at the one-year-old One Regent Place in the area. Four special flats were tagged at prices ranging from HK$14.4 million to HK$17.7 million. The latest prices are also far below the average price of HK$12,268 per sq ft achieved by the Riva project last March. "The pricing is lower than expected, aimed at luring potential buyers into the market," said Lo. If there is a strong response to the launch, this will be an initial positive sign for the market, Lo added, although a bigger test will follow when Cheung Kong begins launching its projects. The city's biggest developer by market capitalisation has received pre-sale consent for Hemera - Lohas Park Phase (3A) in Tseung Kwan O, offering a total of 1,648 units and may launch two other projects - Mont Vest (Phase 1) in Tai Po (1,071 units); and its Lai Chi Kok Road project in Cheung Sha Wan (402 units). Both have received pre-sale consents and in total all three Cheung Kong projects will offer 3,121 units. BNP Paribas expects developers to launch their large-scale projects by offering attractive discounts to stimulate market sentiment in the coming weeks. Paul Louie, head of regional property research at Barclays, said in his latest report that the coming few weeks should offer a glimpse into how deep demand actually is in Hong Kong. "After the strong run of sales from October 2013 to January 2014, there are signs of homebuyer exhaustion as take-up had begun to slow in several recent sales," said Louie in his report. Barclays predicted that home prices could fall by at least 30 per cent by the end of next year.