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In Hong Kong, the supply of new private homes has surged to a record high of 107,000 units, according to the latest estimates by the Housing Bureau. This increase of 2,000 units from the end of June indicates a potential supply of first-hand private residential units over the next three to four years. The rise in supply, now standing at 107,000, is attributed to various factors, including the economic climate and the high cost of borrowing, which have made potential buyers more cautious.
This surge in potential supply, however, does not necessarily translate into immediate completion and occupancy. Analysts have emphasized that the government's estimate signifies the potential availability of homes in the coming years. The actual conversion of these potential supplies into completed projects remains uncertain due to the downward trend observed in the property market.
During the third quarter, developers completed 2,500 units, which is 3.1 times the total in the second quarter. This brought the total completed units for the first nine months of the year to 10,100. Despite this, it is worth noting that this figure is less than half of the full-year forecast of 19,953 units issued in April by the Rating and Valuation Department. This indicates a slowdown in the pace of residential construction by developers.
Developers initiated construction on approximately 3,200 private residential units in the third quarter, marking an 88% decrease from the second quarter. Nonetheless, a total of 11,500 units commenced construction in the first nine months, indicating a willingness among developers to invest in building projects despite uncertainties in the market.
As of the end of September, completed projects had a total of 18,300 unsold units, while uncompleted projects had an additional 68,000 units waiting to be offered for sale, as per the statistics from the Housing Bureau.
In response to the sluggish market and to stimulate property sales, Chief Executive John Lee Ka-chiu announced the relaxation of property curbs on October 25. The buyer’s stamp duty was halved to 7.5% from 15% for non-permanent residents and residents buying a second or additional home. Additionally, the special stamp duty of 10% was waived for homeowners reselling their property after two years, down from the previous three-year requirement. Furthermore, eligible overseas talent are exempt from paying stamp duty on property purchases unless they fail to obtain permanent residency. These measures aim to encourage property transactions and boost the real estate market.
In conclusion, while the surge in potential supply indicates a positive trend in housing availability, the market's response to these factors remains uncertain. The government's recent policy changes may influence buyer behaviour and could potentially lead to increased real estate transactions in the coming months.
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