Private homes devt hits 7-yr high

More developers to start up housing projects in 2013 to meet demand

Residential buildings stand by Aberdeen harbor. As government accelerates land sales, the city's builders are pacing up their project development. Lam Yik Fei / Bloomberg

Hong Kong home builders are accelerating the pace of their project development, with new housing starts in the first nine months hitting 16,100 units, the most in seven years, as the government steps up its effort to boost land supply in the market amid record high home prices.

According to the data released by the Transport and Housing Bureau (THB) on Friday, actual private residential flat construction totaled 5,900 units in the third quarter, up 11 percent from the second quarter this year. In the first nine months of 2012, actual private residential flat development amounted to 16,100 units, the highest number reached in the last seven years.

"As the government is accelerating land sales, we predict actual private residential flat construction may reach 4,000 to 5,000 units in the fourth quarter, pushing the figure to reach over 20,000 units in 2012, representing a 12-year high," Centaline Property Agency Research Director Wong Leung-sing said.

"When the annual residential flat supply reaches approximately 20,000 units in the local home market, it can help restrain property prices through the enhanced residential flat supply in the future," Wong added.

The THB statistics also revealed that the number of the actual private residential unit completion amounted to 3,800 units in the third quarter, representing a jump of 124 percent from the previous quarter. In the first nine months of 2012, the number of units completed was 6,100.

"As the government stipulates in its land sale programs that the developers have to build more small and medium-sized residential flats, no doubt residential flat construction number is rising and it can balance residential flat supply and demand," Midland Realty Chief Analyst Buggle Lau said.

"However, large-sized residential flat supply is still tight and this may affect the residential flat switching process of the local homeowners. We hope that the government can accelerate land sales to supply more large-sized residential flats." Lau added.

The government data also revealed that there are 54,000 private residential units from unsold units in completed projects and units under construction. The 54,000 units figure, plus the 11,000 units from disposed sites where construction may start any time, will add up to 65,000 units that will be available in the coming three to four years.

"The figure shows that the government has streamlined the process of approving the home presales and accelerated the land sale programs. If the government can consistently launch more land sales in the future, it can make market demand and supply more balanced. We predict more developers will launch more residential projects in 2013."

oswald@chinadailyhk.com