Flats forecast: Deputy Commissioner of Rating & Valuation Mimi Brown unveils the Hong Kong Property Review 2007.

This year 12,740 flats are expected to be completed, down from last year's 16,580, according to the Rating & Valuation Department's Hong Kong Property Review 2007.

Releasing the review today, Deputy Commissioner Mimi Brown said the drop reflects the demand and supply in the property market, adding the figure is expected to re-bound to 16,010 next year.

Of last year's flats, about 54% were located in the New Territories, 10% on Hong Kong Island and 36% in Kowloon.

Flats' location

Mrs Brown said of this year's flats, about 70% will be located in the New Territories and the remaining will be in Kowloon and on Hong Kong Island. About 11,320 will be small and medium-sized flats and there will be about 1,420 large-sized flats.

About 68% of next year's flats will be located in the New Territories, she noted, adding there will be 13,640 small and medium-sized flats and 2,370 large flats.

Last year the take-up was 16,400 units while the vacancy rate dropped to 5.9% from 2005's 6%, to 62,600 units.

Prices and rentals of large flats rose 2.4% and 7.1% last year, while small and medium-sized flats' prices and rentals increased 0.67% and 5.8%.

Office completion

Mrs Brown said overall private-office completions last year were 108,000 square metres, three times more than 2005's figure.

She expected office completions this year will soar to 249,000 square metres, and climb to 342,000 in 2008. Last year's take-up was 167,000 square metres and vacant space fell to 753,000.

Office prices for Grade A, B and C offices in last year's fourth quarter rose 4%, 5% and 10% over a year earlier, while their rentals increased 15%, 16% and 12%.

Commercial flats

Last year, commercial flats completed amounted to 183,000 square metres, up 65% over a year earlier. Take-up was 176,000 square metres and the vacancy rate dropped to 9.8%.

Commercial-flat completion is expected to drop to 52,000 square metres this year and re-bound to 125,000 in 2008. Last quarter's commercial-flat prices and rentals grew 1% and 4%.

The review can be downloaded here.