In an exclusive interview with RTHK, David Chiu – who sits on the standing committee of the Chinese People’s Political Consultative Conference – also said this year might see some unsuccessful government land tenders.
The Far East Consortium chairman said given the ample supply in inventory, developers would not feel the need to purchase more sites, likening it to “taking a break from eating and clearing the system when one’s full.
“I believe now the stock in hand by all the property developers collectively – stock that they want to sell – could be as high as 20,000 to 30,000 units,” he told RTHK on the sidelines of the Two Sessions in Beijing.
“I think a lot of developers’ minds today… with interest rates being so high… is how to reduce their gearing first.”
The government has announced plans to put eight residential plots up for sale in the coming year, but not any commercial sites.
“The good news is the government has stopped selling commercial land, which I think is sensible and smart. But we’ve still got close to 10 pieces of land they want to sell,” Chiu said.
“My advice to the government… I would not be too aggressive.”
While home prices in the SAR tumbled 7.1 percent in 2024, the businessman said the property market was not expected to weaken further.
It would be “unlikely” for residential property prices to skyrocket, Chiu added.
“The price should be stable. It’s not going up because of two reasons. Number one, interest rates still remain high. Secondly, frankly, supply is still quite sufficient,” he said.
But Chiu cautioned the commercial real estate market sentiment remained weak, with an oversupply of office buildings.
Chiu, separately, is a proponent of taking part in the development of the Northern Metropolis, citing the cheaper costs and proximity to Shenzhen.
“I believe the future growth of China…is the Greater Bay [Area]. One of the local motifs of the Greater Bay [Area] is Shenzhen,” he said.
“We got the wisdom, we got the education, we got the capital market, but we haven’t gotten the people… We need China as a backup. So linking up [mainland Chinese] young people and Hong Kong’s young people on high-tech is going to be a fantastic marriage.”
