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Figure 12. Selected affordability indicators of private residential property

Note : (*) Estimated using data from the Hong Kong Poverty Situation Report 2015.
Sources: Census and Statistics Department, Hong Kong Poverty Situation Report and Hong Kong
Monetary Authority.

2.2 Non-Residential Property Markets

As we have emphasised in our first Research Report, Hong Kong
faces a chronic shortage in land supply not only in housing, but also in
accommodating a wide array of development needs in the economic and
social aspects.

2.2.1 Office

We have previously quantified that the extent of undersupply in
our Grade A office market during 2010 to 2014 totalled some 2.25 million
sf (Net Floor Area), or one International Commerce Centre (ICC) atop
the Kowloon Station, whilst no marked increase in near-term supply is
expected, according to the research of international real estate consultant
CB Richard Ellis. The firm puts the forecast new supply of Grade A office
in Hong Kong from 2016 to 2020 at a total of less than 8 million sf, i.e. an
average of 1.6 million sf p.a., which trails the corresponding 20-year average
absorption volume of some 2 million sf p.a. (Figure 13), meaning the said
situation of office space shortage is likely to continue.

CB Richard Ellis also pointed out that monthly rents for the Grade
A office market has registered an 8.8%-growth for the whole year of 2015,
bringing average rents to their highest level since mid-2008, which saw
another increase of 2.3% in the first half of 2016.

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