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Supply stock is showing a decreasing trend according to the speed of current sales. At the peak of 3Q13, supply stock was equal to
about 6.8 years of the sales at the time. It has since dropped to the present level of 5.5 years.
As aforementioned, supply stock refers to the number of units that are likely to be completed in the foreseeable future, calculated as
the sum of units from disposed sites where construction may start anytime and units under construction.
Assuming that completions in 2019 and 2020 will be 19,000 units per year, the supply stock is depleted by 19,000 units per
year. However, only 13,500 units will be available for land acquisition by developers to replenish their supply stock, based on the
Government’s new land supply target in the LTHS. This means that supply stock will see a net decrease of 5,500 units each year (i.e.
equal to 19,000 minus 13,500 units).

Furthermore, the current sales speed is at around 17,000 units per year. This would mean that the net decrease of 5,500 units each
year will translate to a gradual decrease of 0.3 years for supply stock in terms of current sales (i.e. 5,500 divided by 17,000 units).

By the end of 2020, we forecast that supply stock will drop to less than five years of current sales.

Developers may realise that the replenishment of their supply stock cannot catch up with the speed of depletion and may at some
point be incentivised to slow down their sales.

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