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HONG KONG: A substantial rise in new housing supply in the first half of this year will do nothing to cool the red-hot property market, analysts say.
Transport and Housing Bureau statistics show that about 7,000 flats were completed in the first six months of the year, equivalent to 97% of the flats completed for the whole of 2009.
However, the figure is still lower than normal: there were 17,300 flats completed in 2005 and 16,600 in 2006. From 1999 to 2004, the number of completed flats ranged between 22,900 and 31,100 a year.
Construction of new flats also rebounded this year, with 6,600 started in the past six months, compared with 8,200 flats in 2009.
Including unsold flats in completed projects and under construction, 48,000 flats were available for sale at the end of last month. Supply is 4.3% higher than three months ago.
Centaline Property Agency's research department said 13,000 flats were ready for construction in the first half, 160% higher than the 5,000 flats ready six months ago. Wong Leung-sing, an associate director of research at Centaline, said the increase was due to the government's move to increase land supply in recent months.
New housing supply, including completed flats, flats under construction and flats in the pipeline, rose 11% to 61,000 flats by the end of June, up from 55,000 in the first quarter, Centaline figures showed.
"The new supply of private housing will continue to increase as the government releases more sites for sale this year," Wong said. He expected 15,687 new flats to be completed this year, 119% more than the 7,157 in 2009. The figure is also the highest level in four years, rebounding from the record low of 8,801 flats, which has been the average total for the past three years.
"In the next four years, the number of completed flats will be about 12,000 to 15,000 a year. But I don't think the new housing supply will go back to the peak level of 30,000 flats a year that we saw in the 1980s," he said. "We face the problem of an ageing population. We don't have enough new demand to support a significant increase in new housing supply."
Trevor Cheung, an analyst at BNP Paribas, said the improvement in housing supply would not affect property prices. "We aren't suffering from a shortage of flats. The sharp increase in property prices in recent years is not due to tight supply, but to low interest rates and a booming economy. We see strong demand from people who want to upgrade their living environment. Many people want to live in a bigger and better flat," he said.
He expected property prices to rise another 10% to 15% by the end of this year. "Property prices will continue to go up unless there is an economic downturn," he said. — South China Morning Post
Transport and Housing Bureau statistics show that about 7,000 flats were completed in the first six months of the year, equivalent to 97% of the flats completed for the whole of 2009.
However, the figure is still lower than normal: there were 17,300 flats completed in 2005 and 16,600 in 2006. From 1999 to 2004, the number of completed flats ranged between 22,900 and 31,100 a year.
Construction of new flats also rebounded this year, with 6,600 started in the past six months, compared with 8,200 flats in 2009.
Including unsold flats in completed projects and under construction, 48,000 flats were available for sale at the end of last month. Supply is 4.3% higher than three months ago.
Centaline Property Agency's research department said 13,000 flats were ready for construction in the first half, 160% higher than the 5,000 flats ready six months ago. Wong Leung-sing, an associate director of research at Centaline, said the increase was due to the government's move to increase land supply in recent months.
New housing supply, including completed flats, flats under construction and flats in the pipeline, rose 11% to 61,000 flats by the end of June, up from 55,000 in the first quarter, Centaline figures showed.
"The new supply of private housing will continue to increase as the government releases more sites for sale this year," Wong said. He expected 15,687 new flats to be completed this year, 119% more than the 7,157 in 2009. The figure is also the highest level in four years, rebounding from the record low of 8,801 flats, which has been the average total for the past three years.
"In the next four years, the number of completed flats will be about 12,000 to 15,000 a year. But I don't think the new housing supply will go back to the peak level of 30,000 flats a year that we saw in the 1980s," he said. "We face the problem of an ageing population. We don't have enough new demand to support a significant increase in new housing supply."
Trevor Cheung, an analyst at BNP Paribas, said the improvement in housing supply would not affect property prices. "We aren't suffering from a shortage of flats. The sharp increase in property prices in recent years is not due to tight supply, but to low interest rates and a booming economy. We see strong demand from people who want to upgrade their living environment. Many people want to live in a bigger and better flat," he said.
He expected property prices to rise another 10% to 15% by the end of this year. "Property prices will continue to go up unless there is an economic downturn," he said. — South China Morning Post
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