Shortfall of 3,117 flats forecast.

(From The Standard)

Byline: Raymond Wang

Hong Kong continues to face a shortfall of new flats in the next few years although two plots of prime government land will be auctioned soon, offering up to 3,400 flats in 2007, Centaline Surveyors said.

The company urged the government to sell more prime sites to address the possible shortfall in supply. ``Apart from those larger sites, the government should put smaller sites on the application list to meet demand from small and medium-sized developers,'' Centaline Surveyors senior manager Chris Chau said. Under the application list programme, developers can trigger an auction by submitting a bid that must match or exceed an undisclosed minimum price set by the government. Chau estimated a shortfall of 3,117 new flats by 2007, even with next month's auction of two lots in Ho Man Tin and San Po Kong. The real estate agency expects supply to dwindle to 24,833 homes _ about 11.3 per cent below the average annual take-up of 28,000. Despite the Sars outbreak, demand for flats rose to 28,264 last year from 26,746 in 2002, but is estimated to fall to 25,778 this year amid higher prices, Centaline said. It said even if demand averages only 21,000 flats a year from 2005 to 2008, a shortfall of 3,167 will probably occur in 2008. The supply estimate for 2007 includes new homes to be built from land conversions, government auctions, tenders from railway operators MTR Corp and Kowloon-Canton Railway Corp, and Urban Renewal Authority projects.

On Tuesday, the government said it will add another site worth at least HK$3 billion to next ...