The year of 2025 has been coming. As the joyful moment ended, everything is back to square one. In reality, we must face the deteriorating economy and the weakened property market. Since the new year has started, property commentators tend to publish relatively optimistic predictions of the property market so that it could comfort the public negative emotions.
However, the reality is always relentless, and the property price has its own track to rise or fall regardless of the public expectations. Recently, a renowned investment bank published a real estate report that shattered the dreams of many experts and property owners.
This report stated that the current land reserves of the four major property developers are sufficient to build 380,000 residential units. In the past year, the sales transactions of first-hand properties were 16,000. It implies that the potential supply units are adequate to meet the demands for the next 23 years. If the agricultural land reserves of the four major property developers are thoroughly transferred into residential usage, the number of supplies can reach 760,000 units. In total, the potential supply units are 1.14 million.
The above-mentioned potential supply units are enough to accommodate 2.28 million people based on two persons per family. 
With these abundant supply units, Hong Kong may become a megacity that can accommodate ten million people.
New World signed a land premium agreement with the government for a project in Fanling North last month. The surveyors estimated that the land premium was HK$1.8 billion and the accommodation value of per square foot (psf) is HK$1,600. If the construction fee is HK$ 4,000 psf, the total cost of psfis HK$5,600. After completion, if it could be sold for HK$7,000 psf., the return on investment is 25%.
If the first-hand properties in North New Territories are sold at this price range in the future, the second-hand properties of this district will face a pressure to reduce its sales prices from current more than HK$ 9000 psf to HK$ 7000psf. The reduction of psf is HK$ 2000 and it means that property prices will be reduced by 30% in the next few years. With the abundant supply units and the declining land premiums, the property price is almost impossible to bottom out in the prolonged weakening market.
