Page 13 - 20190415_LandAdvocacy_EN

In 2018, several leading indicators signalled that the
supply of private housing has slowed down.

The first indicator is the slowdown in the construction
of private housing. According to the Buildings
Department, units that have commenced general
building and superstructure works dropped 44% year-
on-year in 2018 to only 12,600 units.

In fact, the slowdown was particularly severe in the third and fourth
quarters of 2018, where the year-on-year decrease recorded were
50% and 63% respectively.

The drastic drop in the number of commencements of
superstructure works in the past year suggests that actual
construction work has been slowed down. According to a typical
development cycle, superstructure works should last for 2 to 3
years before units are completed. This explains the downward
revision of our completion forecast for 2020 and 2021.

The correlation between the commencement of superstructure
works and the delivery of private housing units two years later is
illustrated in Figure 4. It can be seen that the two lines have a close
positive correlation.

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