Hong Kong home completions rise with land supply
Prices are expected to decline 10pc in HK this year as the number of private flats to be built heads for a nine-year high, led by the rural areas
The number of private flats to be built in Hong Kong this year is expected to climb to a nine-year high after the steady increase of land supply by the government in past years.
Figures from the Rating and Valuation Department's annual publication, Hong Kong Property Review 2014, showed 17,610 flats would be completed this year, 113 per cent more than in 2013 and the highest since 2005.
However, private homes scheduled for completion next year will drop 28 per cent to 12,660.
"The increase in completed flats does affect property prices. But the main factor affecting property prices is how many of these new flats will be released for sale in the market. You can see that the developers did not release a large number of flats for sale in the first quarter amid weak housing demand," said Thomas Lam, head of research at property consultant Knight Frank.
"Unless there is an economic downturn or interest rates increase sharply, forcing developers to release a large amount of flats for sale and cut asking prices to levels below the going rates for second-hand flats, prices would only fall gradually."
The department said property prices continued to rise in the first eight months of last year but started to ease in the fourth quarter, when they grew 9 per cent, compared with the year before.
