According to the latest issue of RLB Construction Cost Update HK Report, it is projected that the tender price index will remain stable or slightly decreased in the coming quarters.
In the third quarter of 2024, Hong Kong’s economy displayed a mixture of progress and challenges. Despite rising exports and investments, a decline in consumer spending restrained growth, leading to a moderate pace of expansion. Notably, the construction sector experienced a marginal decline, marked by a 3.5% decrease year-on-year in building and construction expenditure. However, the public sector made a significant contribution with a substantial 20.0% increase year-on-year.
In the Chief Executive’s 2024 Policy Address, a strong commitment to land production was reiterated, with a housing supply target of 440,000 units set for the next decade to maintain the public-to-private housing ratio of 70:30. As the Northern Metropolis moves towards its maturation phase, prioritizing Innovation and Technology (I&T) development remains a cornerstone of Hong Kong’s Development Blueprint. Ongoing initiatives include the establishment of the Hong Kong-Shenzhen I&T Park in the Loop and the gradual rollout of infrastructure development at the San Tin Technopole. Concurrently, efforts are underway to advance Smart and Green Mass Transit Systems and major transport infrastructure projects, while optimizing land development procedures.
As of December 2024, private land sales for the 2024/25 period have amounted to approximately 9,570m² in site areas. Meanwhile, there are still around 113,800m² of land under tender. Over the last five years, the average annual land sales from 2019/20 to 2023/24 have been about 116,600m². Given the contraction in the construction sector, a further decline in construction expenditure is anticipated in the near future. The prospect of contractors potentially submitting more competitive bids to sustain their project pipelines might lead to a stable or slightly decreased tender price index in the forthcoming quarters.
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