Oversupply woes loom for Hong Kong’s residential sector in the coming years
Over 100,000 units will be available against an annual demand of 18,000.
A recent report by Savills says Hong Kong’s residential segment looks set to face a bumpy road to recovery in 2023. Positive factors include more billionaires coming to Hong Kong via various talent schemes, as well as business and economy gradually resuming to normal, giving an impetus for residential demand to recover.
Nevertheless, the report says a major setback for the sector is oversupply, with over 100,000 primary units likely to be available for sale for the next four years, against an annual demand of around 18,000 units for first-hand properties.
“Potential structural deficit of the Government, as well as developers’ attitudes towards backlog units will be another two key factors impacting the pace of recovery of the segment. We saw mild increments of 1.1% in Kowloon apartment prices in Q1 amid hasten momentum in Kowloon Station quality apartments favoring Mainland buyers, whilst Hong Kong Island and New Territories remained flat,” Savills says.