This year 10,980 flats are due to be completed, up from last year's construction of 10,470 units, according to the Rating & Valuation Department's Hong Kong Property Review 2008.

Releasing the review today, Deputy Commissioner Tang Ping-kwong said he expects the figure to rise to 12,670 in 2009.

About 81% of last year's flats were in the New Territories, 11% in Kowloon and 8% on Hong Kong Island. About 46% of this year's new flats are in the New Territories and 40% in Kowloon. The New Territories' share will rise again to two-thirds next year with Sha Tin and Yuen Long contributing 46% of the completions.

Last year the take-up was 19,850 units while the vacancy rate dropped 4.9% to 52,470 units.

Prices in the secondary market achieved notable growth in the fourth quarter last year, with the overall price index up 21% over the same period a year earlier. The rental index also rose 15%.

Office completion

Overall private-office completions last year were 320,000 square metres, almost three times 2006's number. Last year's take-up was 170,000 square metres and the vacancy rate grew 8.9%.

Mr Tang expected office completions this year to hit 342,000 square metres but will drop to 187,000 square metres next year.

He said core districts are unlikely to produce any new Grade A space in the next two years, whereas Kwun Tong and Eastern District will dominate by providing over 80% of the completions.

In 2009 Kwun Tong will account for 60% of Grade A space completions and Wan Chai 15%. Prices for Grade A offices in last year's fourth quarter rose 26% while Grade B and C both rose 32% over a year earlier. Their rentals grew 13%, 16% and 12%, respectively.

Commercial flats

Commercial flat completions last year were 48,000 square metres, located mainly in Yau Tsim Mong District, Tsuen Wan and Kwun Tong. Take-up was 211,000 square metres, up 20% on 2006. The vacancy rate fell 8.1% to 849,000 square metres.

Higher completions are expected to rise to 98,000 square metres in 2008 and 100,000 square metres in 2009. Retail prices and rental climbed 20% and 10% respectively in the last quarter over a year earlier.