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Hong Kong, with an average property price of $1.24 million, is the world"s most expensive city for housing. Lu Ye / Xinhua

Hong Kong expects to see a fall of about 4.4 percent in the supply of residential flats in the coming 10 years, compared to the Long Term Housing Strategy report revealed last year.

In this year"s LTHS report released on Wednesday, the government estimated that only 430,000 flats will come on stream over the next decade, compared to 450,000 units projected in last year"s LTHS report.

The latest report maintained the 70:30 split between public housing and private flats, translating into 301,000 public housing units and subsidized flats, and 129,000 private residential flats.

"The drop in the residential unit supply estimation is due to the increase in the number of households and the adjustment in the number of private vacant residential flats," said Secretary for Transport and Housing Frank Chan Fan.

In the next 10 years, starting from the 2020-21 year, the government expects the number of public housing units to be built to be 272,000 if it can find sufficient earmarked land for public housing.

The government also expects first-hand private residential flat supply to reach 93,000 in the coming three to four years.

The government announced the new LTHS in December 2014 -- the first long-term strategic housing document since 1998.

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