PROPERTY MARKET
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Hong Kong property

Hong Kong inventory of new flats hit 15 month high, says Centaline

PUBLISHED : Monday, 26 October, 2015, 3:27pm
UPDATED : Thursday, 13 July, 2017, 8:25am

The inventory in Hong Kong’s primary residential market soared to 7,176 units for the three months to September, the highest since the second quarter of 2014 and will be further bloated through the end of the year, according to Centaline Property Agency.

The data was revealed at a time when dwindling buying demand, slowing economic growth, an increase in new supplies and an imminent interest rate hike by the US Federal Reserve which would impact housing rates in the city.

“The inventory will continue to increase in the fourth quarter,” said Wong Leung-sing, an associate director of research at Centaline Property Agency.

The number of unsold units jumped 38.7 per cent in the third quarter, from 5,174 in the second quarter, according to data monitored by Centaline on 60,309 units in 184 new projects put on the market. Of the total, 53,119 of them had been sold.

The previous record was 7,360 units in the second quarter of 2014.

The unsold units are located in Hung Hom, Tung Chung, Ma On Shan, Yau Ma Tei and Tsim Sha Tsui, it said.

“Hung Hom recorded the largest number of inventory with 675 unsold units,” he said.

In Hung Hom, the majority unsold units is at Kowloon Development’s Upper East, followed by Sun Hung Kai Properties Century Link phase two development in Tung Chung.

Sammy Po, chief executive at Midland Realty’s residential department expects home prices would fall five per cent from now to December, and rents could drop eight per cent during the same period.

A 284 square-feet unit at City One Shatin sold for HK$3.65 million, or HK$12,852 per square foot, the lowest in the past several months, according to agents.

Developers have lowered their selling prices with the pricing gap between primary and secondary market having narrowed to 5.7 per cent in the past three years, compared to 20.5 per cent before the government imposed double stamp duties in 2012.

CLSA last week said the sell-through rate of new launches has plummeted, with 65 per cent recorded this month, against 90 per cent last month.

Danny Wong, the co-founder of Centaline, was quoted by Deutsche Bank as saying that the three positive pillars that supported rising property prices have faded, and there are now an increasing number of negative factors affecting the Hong Kong property market.

Speaking at the Deutsche Bank luncheon last week, Wong expects property price drops of at least 40 per cent from the current level.

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