Land disposal slowdown signals tighter housing supply in 2027-28

HONG KONG, 13 April 2026 – The new housing supply is currently near a short-term peak, but the volume of government land sold for private residential has fallen sharply in recent years. Based on Hong Kong's public land disposal figures, sites sold between the 2023/24 and 2025/26 financial years are expected to yield around 6,000 units per annum, a significant decline from previous years. This is likely to result in a trough in first-hand residential supply around 2027–28, according to JLL's latest Hong Kong Residential Sales Market Dynamics released today.

An analysis of Hong Kong's public land disposal for private residential development, including government land sales, Urban Renewal Authority (URA) projects and MTR Corporation tenders, shows that the five-year average supply stood at around 11,000 units per annum between the 2017/18 and 2021/22 financial years. This figure declined sharply in the subsequent period, falling to approximately 6,000 units per annum in the 2023/24 to 2025/26 financial years, a reduction of approximately 45%. This significant contraction in land disposal capacity, driven primarily by subdued market conditions, frequent unsuccessful tenders and a more cautious approach to site releases, is expected to have a lagged impact on first-hand private residential supply.

Given the typical three- to four-year development cycle from successful land acquisition to pre-sale launches, the reduced land supply in recent years is expected to result in a trough in first-hand residential supply around 2027–28. This projected low-supply phase is consistent with broader market assessments pointing to a slowdown in completions and primary market launches during this period, before a gradual recovery supported by enhanced land preparation in emerging development areas, including the Northern Metropolis.

Norry Lee, Senior Director of Projects Strategy and Consultancy at JLL in Hong Kong, said: "As the sales market continues to recover, developers are better positioned to adopt a more measured sales strategy compared with previous quarters. With the supply overhang gradually easing, the pressure to accelerate stock clearance has diminished. At the same time, intensifying competition for a limited number of urban land parcels is likely to drive more aggressive bidding in future government land sales."

Cathie Chung, Senior Director of Research at JLL in Hong Kong, added: "The volume of government land successfully sold for private residential development has remained low in recent years. This trend is compounded by Housing Bureau data showing that private residential construction starts in 2025 fell to a five-year low of just 8,800 units, signalling a decline in new housing supply in the years ahead."

"Over the medium-term, Hong Kong's residential market is transitioning from a period of relatively ample supply to a more constrained pipeline amid recalibrated demand. This inflection point has important implications for pricing resilience, developers' land acquisition and project development strategies, as well as sales and marketing approaches, and is expected to provide underlying support to residential prices," she said.