Property supply to expand in H2

Rise in interest rates could prompt homeowners to sell.

Midland Realty, Hong Kong’s largest real-estate firm, expects property prices to continue falling as interest rates rise and more apartments are built.

Prior to the recent tough government rules, it was a wise move to put money into property rather than putting it into the bank. This could change if rates for depositors start to climb.

As there are more than a million private residential units in Hong Kong, every homeowner is a potential owner of supply.

Credit Suisse said in a report it expects property supply to expand significantly in this second half. In the next three to four years, the government estimates that some 70,000 units will come onto the first-hand market, the highest level of supply seen since 2007.

Developers started building nearly 7,000 new apartment units during the second quarter, the highest figure on record since 2005. The expansion in new apartment construction follows the government’s push to expand the city’s housing supply.