Property supply to be stable in coming yrs
Updated: 2008-03-14 07:08
By Joseph Li(HK Edition)
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With some 65,000 units available in the market, the supply of private domestic units will be quite stable in the coming years, the Rating and Valuation Department predicted yesterday.
As to offices, completions amounted to 320,000 square meters last year, almost three times the completions in 2006.
For the next two years, office completions are estimated as 342,000 square meters and 187,000 square meters respectively.
However, not too many new grade A offices will be built in such traditional core districts as Central, Wanchai, Causeway Bay and Tsim Sha Tsui.
The Rating and Valuation Department yesterday announced the preliminary findings of the Hong Kong Property Review 2008.
Private domestic completions last year were 10,470, the lowest in 10 years (of which 81 percent are in the New Territories, 11 percent in Kowloon and 8 percent on Hong Kong Island), acting deputy commissioner Tang Ping-kwong told in the press conference.
As for 2008, the number of competitions will be 10,980 and will rise to 12,670 in 2009.
But Tang did not think there will be any shortage in supply despite the 'low' number of completions in 2007 versus the five-year average of 2002-06 being 23,400.
"There will be no shortage of supply," Tang said. "In the next few years, there will be over 10,000 completed yet unsold flats, 45,000 under construction plus another 10,000 flats on approved lands of which construction has not started. So there will be a housing supply of 65,000 units over the next few years."
For office spaces, he predicted grade A office completions would top 332,000 and 157,000 square meters in 2008 and 2009 respectively. But for this year, it is unlikely that too many grade A offices will be built in the core districts as over 80 percent of the new completions will be located in such non-core districts as Kwun Tong (in East Kowloon) and Eastern district (on Hong Kong Island).
As for 2009, about 60 percent of grade A offices will be located in Kwun Tong and 15 percent in Wanchai.
It was also revealed that prices and rents of small/medium units, as buoyed by the robust economic growth, had risen by 20.8 percent and 14.4 percent respectively in the fourth quarter of 2007 against the same period in the previous year. Meanwhile, prices and rents for large flats had risen by 26.3 percent and 18.2 percent respectively.
However, Tang was unwilling to forecast price changes in 2008, saying it is up to supply/demand, economic conditions and the market force to decide the prices.
In the opinion of Hong Kong Institute of Surveyors past president Raymond Chan, the overall supply of residential flats is quite enough and he does not envisage any supply shortage in the coming years.
In the light of rapid economic growth and falling interest rate, people have greater confidence in the future and prefer to buy instead of rent properties, thus producing higher price increases than rental increases.
As for grade A offices, given that rents in non-core districts are much lower, many companies prefer to move out of core districts. "With the help of computer technology, companies can relocate their logistic support services to non-core districts and maintain communication among different departments, while those who do not need to meet with customers very often also do the same," he commented.
(HK Edition 03/14/2008 page1)