Housing Supply To Remain Limited

The latest figures from the Hong Kong Government show that the supply of new housing will remain at levels below the expected take up rate for 2007, 2008 and 2009. The existing stock of unsold units (either completed or under construction) is expected to decline slowly over this period. This is not unexpected but, the confirmation combined with the cut in stamp duty for properties under HK$2 million, tax rebates for the middle class, planned extensions of the MTR line (even if six years away) and the return of negative real interest rates on deposits should help to underpin the market in the medium term.