Hong Kong has completed nearly 7,000 apartment units in the first half of 2010. This is 97 percent of the total amount that was constructed in 2009, according to statistics released by the Transport and Housing Bureau.
But many analysts believe that the large number of apartments constructed this year will not affect Hong Kong’s red hot property market.
“The sharp increase in property prices in recent years is not due to tight supply, but to low interest rates and a booming economy,” said Mr. Trevor Chung, an analyst at BNP Paribas. “We see strong demand from people who want to upgrade their living environment. Many people want to live in a bigger and better flat.”
“Property prices will continue to go up unless there is an economic downturn,” added Mr. Chung, stating that property prices would likely increase 10 percent to 15 percent by the end of 2010.
The number of apartments completed this year is still low compared with the previous years. Between 1999 and 2004, there were 22,900 to 31,100 apartments completed each year, while in 2005 and 2006, the number of units completed were 17,300 and 16,600, respectively.
The completion of new apartments this year has also dramatically increased, with 6,600 units completed in the first half of this year compared with 8,200 units for the whole of 2009.
The increase in supply was primarily due to the government’s measures, said Wong Leung-sing, associate director of research at Centaline Property Agency. “The new supply of private housing will continue to increase as the government releases more sites for sale this year,” he said.