19,000 private residential units could be provided in 2015: Knight Frank

Aligning with the government's average supply target.

In February, the government announced in the 2015-2016 Budget that this year's Land Sale Programme would include 29 residential sites--mostly located in the New Territories--which will provide about 16,000 flats.

According to a research note from Knight Frank, taking into account land supply from all different sources, a total of 19,000 private residential units could be provided in the year, meeting the government's annual average supply target.

Further, soon after that, the Hong Kong Monetary Authority announced a seventh round of market tightening measures on 27 February. This follows the recent surge in the prices of small to medium-sized residential units, despite the implementation of various property market cooling measures since 2010.

Here's more from Knight Frank:

For residential properties valued at HK$7 million or below, the maximum Loan-to-Value (LTV) ratio has been lowered to 60% from the previous 60-70%.

Moreover, for borrowers purchasing a second property, the maximum debt-servicing ratio has been lowered from 50% to 40%.

We believe these new measures will affect buying sentiment in the sales market of small to medium-sized homes in the short-term.

However, the policies will only reduce transaction volume and will have limited impact on prices, due to strong demand from first-time buyers and the lowering of the LTV ratio by a relatively small 0-10%.