Hong Kong housing market to see spate of large-scale launches

Hong Kong’s housing market will soon feel the pressure of increased supply with 17 new developments consisting of 4,577 private homes potentially becoming available for launch in the next two months.

In the face of keen competition, analysts expect developers to introduce incentives such as offering first mortgages with high loan to value ratios in order to boost sales.

Large-scale launches in the pipeline by the end of the year include the 912-unit The Spectra joint-venture development in Yuen Long by K Wah International and Sino Land, and Cheung Kong Property’s 1,129-unit Yuccie Square, also in Yuen Long.

The sales brochures for Kerry Properties’ 1,100-unit The Bloomsway in Tuen Mun and Wheelock’s Capri, with 415 units and 13 houses, in Tseung Kwan O were posted online last week. The first price lists for both projects are likely to be released this week, according to investment bank BNP Paribas.

BNP Paribas analyst Patrick Wong said he expected the upcoming spate of large-scale launches, together with the aggressive sales strategies of some developers, would boost primary market sales volumes in the coming weeks.

However, Barclays is more bearish about the market’s prospects.

According to the government, there were 86,000 units of private housing supply under construction at the end of September. As it expects them to become available in the next three to four years, that would suggest annual presales could reach at least 21,500 units.

Barclays said homebuyers had become used to the idea that increased supply would only come through in the long term.

“We think the bigger launch pipeline may possibly help change the mindset of homebuyers,” analyst Paul Louie said in a report released on Sunday.

Kerry Properties is controlled by the Kerry Group, the controlling shareholder of the SCMP Group, which publishes the South China Morning Post.