Hong Kong Property:Will Developers Cut Prices to Boost Sales?

We see major developers have little intention to cut prices — One keyargument from the bear camp for a continuous price decline is that, on the back ofrising supply and falling home prices, new launches will undercut the secondarymarket to generate faster sales. However, unlike the 1998-2003 downcycle, we seemajor developers have very little incentive to cut prices because 1) developers havealready presold more units than completions in the past two years, building up goodreserves for future revenue recognition; 2) residential completions are estimated atan average 17,700 units for 2016-2018