Analyst warns unsold new home inventory may rise in coming quarters
An analyst says unsold new home inventory in Hong Kong may rise over the next one to two quarters due to weaker buying power and interest rate pressures. The Housing Bureau reported potential supply of 100,000 private homes over the next three to four years.
The Housing Bureau’s data shows that Hong Kong’s potential supply of private residential units over the next three to four years has rebounded to 100,000, driven by an increase in ready land supply and units under construction.
Wang Zhaoqi, Director of East Asia Asset Management at ARUP, said that buying power in the third quarter weakened compared with the first half of the year. He noted that sales performance varied among individual new projects, and that with the pressure of interest rate hikes, developers will not launch large-scale projects. He believes the number of unsold completed units in the next one to two quarters is likely to rise.
Wang pointed out that considering the still-high level of unsold inventory, developers will not rush to buy land at high prices. In the short term, government land supply will mainly consist of small- and medium-sized residential sites.
He estimated that, driven by a slight increase in unsold inventory and new construction projects, the potential supply of new homes will rise to around 102,000 by the end of the year.