Hong Kong homebuyers spoiled for choice as 10,000 more flats to hit market this year

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New flats made available this year will total nearly 20,000, according to Midland Realty, as developers pin hopes on rate cut to spur sales

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A view of Novo Land, a residential project by Sun Hung Kai Properties in Tuen Mun, on June 7, 2024. Photo: Edmond So

Cheryl Arcibal

Published: 8:30am, 12 Aug 2024Updated: 8:41am, 12 Aug 2024

Hong Kong developers show no sign of slowing down project launches in coming months even as high interest rates continue to dampen demand for new homes and hold prices down, according to analysts.

Nearly 10,000 flats in 24 new properties are tipped to launch before year-end, matching the 9,911 units put on offer in 27 projects in the first seven months, according to Midland Realty. Developers were able to sell about 4,800 or a little over 48 per cent of the flats made available to buyers in the January to July period, Midland said.

The long-term supply of new flats in Hong Kong also remains robust, with 1,416 private homes completed in June, a five-month high and nearly 17 times higher than the 80 units completed in May, according to the latest data from the Rating and Valuation Department. In the first half, 7,095 units were completed, a decrease of 6 per cent from a year ago.

In the next three to four years, as many as 109,000 new flats are expected to flood Hong Kong, according to the housing bureau.

“Given the current market inventory exceeding 22,000 new units, developers have adopted a strategy of prioritising sales volume over pricing, to sell the properties actively in the market, in order to maintain a balance between market supply and absorption,” said Sammy Po Siu-ming, CEO of Midland Realty’s residential division for Hong Kong and Macau.

The supply glut is one factor keeping home prices in check. The other is high interest rates, which remain at a 23-year high, as the city’s monetary authorities stay in lockstep with Federal Reserve policy to maintain the local currency’s peg to the US dollar.