Bloomberg: Number of units in Hong Kong's land sales plan has been declining for 3 consecutive years, setting a 15-year low of only 8340 units in the current fiscal year.

On January 7th, the Hong Kong Development Bureau announced the land sale plan for the fourth quarter of the current fiscal year (January to March 2025), with a total of only 1100 units for residential sites, HKHA projects and private redevelopment projects, a drastic decrease of half compared to the 2200 units announced in the third quarter. This brings the total number of units that can be built in the current fiscal year to only about 8340, accounting for around 63% of the annual target. Lau Ka Fai, Chief Analyst at Midland Realty, pointed out that the number of units that can be built from the land sale plan has been declining for 3 consecutive years, decreasing by about 45.9% compared to last year, and dropping by over 30% compared to the low of 12198 units in the 19/20 fiscal year, reaching a 15-year low since the Hong Kong government actively began land sales in the 2010/11 fiscal year. This reflects the Hong Kong government's timely response to the oversupply in the short term by reducing land sales, which also helps to increase market confidence. At the same time as the decrease in land sales, new applications for pre-sale flats have also hit an 11-year low since 2013. According to data from Midland Realty's research center, there were only 62 new applications in December at 7 Hospital Road, Mid-Levels West, resulting in a total of only 7059 new applications for private residential units last year, a decrease of about 13.4% from the 8148 units in 2023, reaching an 11-year low since 2013. In fact, even including subsidized units sold, the total number of new applications last year was only about 10,059 units, also hitting an 11-year low. It is believed that due to the high remaining stock, developers have significantly slowed down the pace of applying for pre-sale flats for their projects over the past 2 years. Although the number of new applications for pre-sale flats and land sales for the current fiscal year have hit a new low, the inventory level is still relatively high. Together with the approved pre-sale flats for unsold private residential units, the short-term supply is sufficient to meet demand. According to data from Midland Realty's research center, as of the end of last year, there were approximately 21,674 units in the remaining stock, and a total of about 16,493 unsold private residential units with approved pre-sale agreements, totaling over 38,000 units that are ready for sale at any time.