Hong Kong property: more supply, cheaper home prices likely to set market trends in first half of 2024, analysts say
- Home prices to come under more pressure in the first half of 2024 as new units enter the market faster than developers can sell them
- Kai Tak, Wong Chuk Hang, Yuen Long and Tseung Kwan O are districts with the most presale projects, according to some estimates
Some 13,400 new units are expected to be launched in the city between now and June, with developers likely to turn more aggressive in cutting prices to clear inventories, they said. Interest rates are not falling fast enough to boost demand, and that situation will continue to weigh on home prices, they added.
Kai Tak, Wong Chuk Hang, Yuen Long and Tseung Kwan O are districts with the most presale projects in the first half of 2024, according to estimates published by Citigroup, UBS and Midland Realty. Four projects in Kai Tak will offer a total of 2,823 units, while four in New Territories will add 6,716 units to the market.
The number of unsold units have accumulated over the past two years as demand slumped after 11 rounds of interest-rate increases since March 2022. The city’s developers sold 49 per cent of their completed units in 2022 and 72 per cent of them last year, Citigroup estimated.
“Developers will remain under pressure on our estimated 20,600 per annum new completions in the next two years,” Ken Yeung, a property analyst at Citigroup said in a research report earlier this month. Given the high holding costs, they will step up price cuts to attract more buyers, he added.