More residential and office completions in 2013

More residential and office completions in 2013

Danny Chung

Property developers are on course to complete more residential and office space for 2013 as uncertainty continues to loom over the property market.

According to preliminary statistics by the Rating and Valuation Department, about 13,550 units are scheduled for completion in 2013, edging up by 3.3 percent year on year while for 2014, the number of completions is expected to be 15,820 units.

A development is considered complete when the Buildings Department issues an occupation permit for it.

The New Territories will account for most of the new completions for 2013, at 83 percent compared with 49 percent in 2012.

“After a brief consolidation in the second half of 2011, residential prices resumed the rising trend with appreciable growth in 2012. The overall price index for the last quarter of 2012 increased by 24 percent when compared with a year ago,” the department said.

In 2012, Hong Kong continued to see an inflow of funds from overseas and especially from mainland China to invest into the property market.

This prompted the government to announce a new round of measures last October to prevent a property bubble from forming by increasing stamp duty rates.

With more residential and office completions in 2013
The government is also continuing with its policy to sell more land to developers to increase new supply of property and hence force down prices.

Causeway Bay from above. Prices for office property increased by 21 percent in 2012  (Danny Chung)

Causeway Bay from above. Prices for office property increased by 21 percent in 2012 (Danny Chung)

For office property, completions for 2013 are expected to be up 16.2 percent to 158,000 square metres of which 123,000 square metres will be grade A offices in mostly non-core districts with Kwun Tong alone accounting for 45 percent of new supply.

Completions for 2014 are expected to be similar at 159,000 square metres of which 132,000 square metres will be grade A offices with Kwun Tong again accounting for most of the new supply at 77 percent.

The price index for grade A offices in the fourth quarter of 2012 was up 14 percent year on year but when grade B and C offices are included, prices jumped 21 percent during the year.

For commercial property, new supply in 2013 will be 58,000 square metres compared with 90,0000 square metres in 2012, representing a drop of 35.6 percent.

For 2014, commercial property completions are expected to be about the same level, at 60,000 square metres.

Investors who were lucky or bold enough to invest in commercial property last year saw prices surge 38 percent in the fourth quarter year on year, according to the preliminary statistics.

Completions for private flatted factories in 2013 are expected to be 16,000 square metres compared with the 46,000 square metres in 2012, all of which was in Tsuen Wan.

In 2014, completions are expected to go back up, to 35,000 square metres.

Investors who bought into factory properties were likely to be happiest in 2012.

“Prices escalated uninterruptedly during the year, culminating in 41 percent increase in the fourth quarter of 2012 over the same period in previous year,” the department said.

 

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