Deutsche Bank said its analysis shows that Hong Kong developers currently have 108,137 units pending completion in their pipeline. The next five years' completion is about 18,082 units/year for 2016-2020, some 40% higher than the average in 2004-15.
Despite higher expected completions, developers are increasingly unable to lock in earnings ahead, as the presold ratios for 2016 and 2017 completions are only 52% and 11%, said the research house. Inventory pressure and upcoming supply are actualizing in the physical market and price declines will need to accelerate.
DB remains negative on physical home prices, expecting a 15% further drop in the remainder of 2016.
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