Page 18 - LH_Research_Report_2020_Eng

Superstructure commencements went into a freefalluperstructure commencements went into a freefall
S

(Figure 7) Number of superstructure commencements vs. number of units completed two years later

Completions (top axis) Notification of Commencement of General Building
and Superstructure Works (bottom axis)
Year of completions
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

25,000
-44%
20,000 from
the
Number of units 15,000
peak

10,000

5,000

0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Year of superstructure commencements
Source: Buildings Department

The second indicator pointing to a decline in private housing supply is the slowdown in construction commencement.
According to the Buildings Department (BD), units that have commenced general building and superstructure
works lingered over the level of 12,600 units in both 2018 and 2019. This was after it dropped 44% from its peak in
2017.

In a typical development cycle, superstructure works would last for two to three years before units are completed. Figure 7
suggests that there is a positive correlation between the commencement of superstructure works and the completion of private
housing units two years later. Therefore, private residential completions from 2020 onwards are likely to be subdued as a result
of reduced construction activities observed since 2018.
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