Hong Kong’s glut of unsold flats could put more pressure on prices
- Some developers may offer discounts of as much as 10 per cent as proposed vacancy tax looms
- Completed but unsold units could see a further 5 per cent to 10 per cent decline, placing them on par with pre-owned homes
Hong Kong home builders could face greater pressure to slash prices as the number of completed but unsold new flats they held increased at the end of last year.
Analysts said some home builders would offload stock by cutting prices by 5 per cent to 10 per cent from the current levels on completed unsold units, stepping up efforts to lower inventory as the government’s proposed vacancy tax looms.
The city’s developers held 3,295 unsold homes which were completed in 2017 and 2018 as of December, about 10 per cent higher than November’s figure, according to data from Centaline Property Agency.
The data is based on 93 projects offered for sale since 2016, according to Centaline.
“The number of unsold homes could not drop amid the correction in the housing market in the second half of last year,” said Wong Leung-sing, senior associate director of research at Centaline. “Quite a number of completed homes unsold will need to be cleared this year if developers want to avoid paying the extra [vacancy] tax.”