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February 27, 2020

Private sector will complete 19,600 private residential units annually from 2020 to 2024

Response to the housing supply announced in the Budget 2020 by K K Chiu, International Director, Chief Executive, Greater China of Cushman & Wakefield: 
     According to the latest forecast announced in the Budget 2020, it is estimated that the private sector will, on average, complete about 19 600 private residential units annually from 2020 to 2024. The level of private housing supply is higher than that indicated by the Long Term Housing Strategy Annual Progress Report 2019 published in late 2019, which showed that the supply of private housing for the next 10 years (2020-2029) is 12,900 units per year.
     Despite this, the latest announced supply level is still dwarfed by the average annual private housing supply of 29,500 units in the 1980s, 26,500 units in the 1990s, and 18,800 units in the 2000s. The 2020-21 Land Sale Programme comprises a total of 15 residential sites, capable of providing about 7 500 residential units. This will be the lowest supply provided by land sale program in the last decade since the government resumed land sale. Contribution from MTR property and URA projects aside, we look forward to seeing the target of housing supply be met through the various efforts in increasing land supply by the government.  
     The government's lack of long-term planning on land supply and land use has caused a serious shortage in homes and thus a perpetual price surge over the last two decades. Recently, home prices were only slightly dented under the multiple impacts of trade tensions, social unrest and COVID-19 outbreak. One can foresee that home prices will pick up strongly when the economy turns around and market sentiment improves once the pandemic is over. The housing issue will then become an even bigger headache for the government. We urge the government to consider all possible options to address long-term land and housing supply.