Hong Kong's stock of first-hand private flats that could reach the market over the next three to four years rose by about 4,000 units in the third quarter to 100,000, Housing Bureau figures showed, as a closely watched gauge of resale prices fell for a third straight week.

For developers and the banks that lend to them, the two numbers point the same way. Builders have been clearing new projects with price cuts, but the inventory behind those launches is growing again, and buyers in the secondhand market are holding back. That leaves pricing power with whoever needs cash least, and so far that has been the buyer.

Supply back above 100,000

The bureau's quarterly tally, as of Sept. 30, counts about 19,000 unsold flats in completed projects, about 62,000 unsold units under construction and about 19,000 units on sites where building can start at any time. Small and midsize flats of under 70 square meters make up about 91,000 of the total. The bureau said another 10,800 units on 10 sites are expected to join the "disposed sites" category in the coming months, which would lift the figure further.

The total had fallen to 96,000 at the end of June, down 5,000 from the previous estimate, according to the government's news service. The rebound came mostly from land: units on sites ready for construction rose by about 3,000 in the quarter, and unsold units under construction rose by about 1,000, HK01 reported, while the count of completed but unsold flats was unchanged.

Actual building slowed. Construction began on about 2,800 private homes in the third quarter, roughly half the second quarter's 5,600, and about 1,700 units were completed, down about 73% from the prior quarter, according to the bureau data as reported by HK01. Starts for the first nine months totaled about 12,500 units.

A director at engineering firm Arup who heads its East Asia asset management business told HK01 that new-home sales in the third quarter ran a little slower than in the first half. He expects about 15,000 starts and 12,000 to 13,000 completions for the full year, and forecast that monthly transaction volumes in the second half would run 20% to 30% below first-half levels. With supply ample, he said, government land sales over the next quarter or two are likely to favor small and midsize residential sites.

Resale index at a 15-week low

The Centa-City Leading Index compiled by Centaline Property, which tracks secondhand prices at large estates, fell 0.33% to 159.38 in the week to Oct. 30, its lowest since mid-July, HK01 reported. It was the index's third consecutive weekly decline, a run last seen in August 2024, for a cumulative drop of 1.13%. The gauge is down 1.71% from its 2026 peak of 162.16 in mid-August, but still up 10.6% since the start of the year and 16.7% below its August 2021 record.

Prices fell most in the urban districts. Centaline's Hong Kong Island estate index dropped 1.40% on the week and Kowloon's fell 0.54%, while both New Territories gauges rose. A senior associate research director at Centaline said developers' low opening prices were pulling buyers toward new projects, leaving secondhand owners and buyers in a standoff. She expects the index to test 158 points but still sees prices ending 2026 about 10% higher. Official September figures, which showed a second monthly gain, are covered in our report on the Rating and Valuation Department index.

Discounts move the stock

The pattern has held through October. Derek Chan, head of research at Ricacorp Properties, said in late October that new launches "continue to clearly outperform the secondary market," according to the South China Morning Post, as developers used price cuts, flexible payment terms and rebates to turn over inventory. Sun Hung Kai Properties sold all 142 flats offered at its Sierra Sea project on Oct. 17 at discounted prices from HK$5.38 million, and Yuexiu Property sold out 220 flats at The Atlas Phase 1 in Yau Tong the same day, the newspaper reported.

Yuexiu said it had sold 578 flats at The Atlas I for more than HK$3.35 billion in a little over three weeks, through price lists and tenders, HK01 reported. On a single day over the weekend of Oct. 31 and Nov. 1, it sold eight units by tender for more than HK$56.55 million, at HK$16,275 to HK$19,106 per square foot, The Standard and HK01 said.

That was most of the weekend's business. With no fresh launches, developers sold about 29 new flats over the two days, down more than 91% from 349 the weekend before, HK01 said. Across all property types, agency statistics counted 5,775 deals in October, down 10.3% from September, the outlet reported.

The next tests are already priced. Henderson Land Development published a first price list of 50 flats on Oct. 28 at its One Upper Lane project in Tai Kok Tsui, with one- and two-bedroom units from HK$5.02 million after discounts of up to 6% and an average discounted price of HK$20,348 per square foot. The bureau's next supply update, covering the fourth quarter, will show whether the 10,800 units waiting on land formalities push the pipeline higher still.