Aor 1971
Upward trend in HK housing, office and factory construction
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THE number of privately built housing units in Hong Kong during 1970 ex- ceeded by almost 45 per cent. comple- tions in the previous year but supply was still well below the average for the five-year period 1965 to 1969. Esti- mates for the supply coming forward in 1971 and 1972 are more encourag ing.
The improved supply of new ac commodation in 1970 resulted in an increase in the number of vacant domestic premises at January 1971, compared with a year previously. These and many other aspects of the real estate position in the metropolitan area of Hong Kong, Kowloon, New Kowloon and the rated portion of the New Territories are dealt with in a re- port by the Commissioner of Rating and Valuation released today.
Domestic accommodation
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While the number of domestic units completed during 1970 11,140 was a big improvement on the previous year, it was well below the average of 18,823 units per annum over the five year period 1965 to 1969. Prospects over the next two years in the private sector show an estimated 14,476 units for 1971 and some 24,000 in 1972 which should put completions back near the level achieved in the peak building years of the mid-sixties.
Mainly as a result of troubles with contractors, completions in 1970 in the public sector at 13,425 units were well below the published programme, but again a much improved supply is forecast for 1971 and 1972. Overall supply in 1970 in the public and pri- vate sectors amounted to 24,565 units against an average of 43,711 units per annum for the five year period 1965 to 1969. For 1971 and 1972 overall supply is estimated to reach 50,537 and 50,974 units respectively. With completions in 1971 and 1972 esti- mated at more than twice the 1970
Far East BUILDER, April 1971 Page 35
output it is expected that demand and supply will again be reaching equili- brium by the end of 1972.
In the private setor, domestic va- cancies at 3,453 exceeded the number vacant in the previous Janauary by some 42 per cent. Domestic units vacant in recent years have been: March 1966 19,224; January 1967 16,899; January 1968 14,935; Janu- ary 1969 7,559; January 1970 2,439; January 1971 – 3,453.
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The rate of occupation during 1970 was calculated at 844 units per month which was less than the 1,046 units per month taken up during 1969. However, these "demand" figures do not provide a very reliable guide in a sellers' market where rents and pur- chase prices asked tend to be high and a proportion of what is vacant is in the older unattractive blocks. Completions late in the year also influenced the vacancy figure.
Completions for October to De- cember 1970 were up considerably on the corresponding period a year earlier and approximately 51 per cent. of all vacancies noted in January 1971 were in respect of premises certified for oc- cupation during the previous three months.
A better guide to the continuing demand is provided by an examination of the average period premises remain- ed empty following the issue of an occupation permit. The month by month occupation figures for premises completed in January, 1970, indicated that the average period premises stay ed vacant was 1.84 months compared with 1.91 months the year before, which suggests there has been no slackening in the demand for accommo- dation.
In respect of the various domestic classifications, it is noted that despite the extreme shortage of "luxury-type" flats, the occupancy rate for large flats, expressed in relation to what was available, was only 57 per cent, while
for houses it was lower still at 35 per cent. Here again, however, "late" com- pletions tend to influence the result, as 66 vacant large flats are in one block in the Peak district certified for occu- pation only at the end of November, 1970.
The supply of new accommodation for 1971 in the large and medium flat classifications is estimated at 695 and 1,351 units respectively, a considerable improvement on the 1970 figures, which should help to ease the present shortage of such commodation. The estimated completion of over 3,000 such flats in 1972 is well above the supply in any previous year and will help further to meet the demand which has increased considerably in re- cent years.
Noteworthy is the large number of small flats estimated to be completed in 1971 and 1972 compared with the rather small number of tenement floors. These figures illustrate the trend of recent years to the preference by purchasers and tenants for small self-contained premises rather than the shared facilities provided by tradi- tional tenement development.
The report notes that the propor- tion of new accommodation built for letting is declining while the trend towards owner-occupation continues. Some 91 per cent. of the 1970 output was initially built for sale compared with 86 per cent. in 1969 and 81 per cent. in 1968. The trend towards owner-occupation is illustrated by an analysis of premises valued for rates during 1970, which shows that 66.62 per cent. of new accommodation was occupied by owners and their families initially, compared with 57.85 per cent. noted in a similar analysis last year. Almost 74 per cent. of premises priced at "$30,000 and below" were initially occupied by owners and their families, and in only one bracket, "$60,001 to $100,000", is the in- cidence of owner-occupation higher.
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