Hong Kong property sales have risen for the second month in a row this September. Sales volumes rose by almost 40 per cent in August, according to Land Registry data, reaching a total of 7,826. In September, sales continued to climb a further 34.4 per cent, taking the total sales volume to its highest level in four years.
Knight Frank attributes the rise mainly to new-build property, as a growing number of end-users and investors enter the market. Indeed, many new residential projects are over-subscribed, reveals the agency’s research, with 95 per cent of the 545 units in One Kai Tak, in Kowloon City, sold within a week of launching. Primary projects with small units are particularly popular, with developers expected to continue focus on launching smaller units to meet the strong market demand.
This improvement in sales performance, as well as land prices stabilising, is also seeing a number of major developers return to the market. Major developers, particularly those from the mainland, are now bidding aggressively to beat competition for land sales. Knight Frank highlights the sale of a residential site in Kau To Shan, Shatin, which was sold at HK$8,001 per square foot, 33 per cent more than even the highest expectations.
“The streaks of aggressive bids are expected to continue as land sales tenders have become more competitive because of the higher participation rate of mainland developers,” says Knight Frank. “Despite abundant housing supply and a potential interest-rate hike, strong residential demand and developers’ competitive sales packages have resulted in a significant rebound in transaction volume. Home prices, therefore, are set to remain stable over 2016.”
Prices, though, remain 8 per cent below their peak in September 2015.
Hong Kong property sales slide in summer
23rd August 2016
Hong Kong property sales slid this summer, with the volume of residential transactions dipping 8 per cent month-on-month.
New figures from the Land Registry show that the number of units sold in June 2016 fell to 4,243, reversing three months of growth. Total transaction value for residential units fell 8.8 per cent to HK$29.7 billion.
However, prices remained stable, notes Knight Frank, due to “sustainable end-user demand”. Indeed, developers enjoyed strong sales in recently launched new-build projects, with Park Yoho Venezia in Yuen Long selling 95 per cent of its 62 units and The Ascent in Cheung Sha Wan selling over 94 per cent of its first batch of 125 units in a single day.
The mood is upbeat, with Buggle Lau, chief analyst at Midland Realty, telling the SCMP that property sales will “rebound this month as the market warms up”.
“New projects have registered good sales responses in general,” he added, predicting that transactions will climb to a 13-month high.
Wong Leung-sing, associate director of research at Centaline Property Agency, predicting that sales will increase to 4,800 this month, with the estimated transaction value amounting to HK$35 billion.
“Residential transactions staying above 4,000 for four consecutive months indicates the market has stabilised,” he added. “The recent rebound in home sales is the result of investors seeking a safe haven for cash after the Brexit.”
Developers, meanwhile, are expected to continue offering discounts to entice buyers and offlaod inventory ahead of a possible US interest rate hike later this year.
Knight Frank predicts prime property prices will fall between 5 and 10 per cent this year, with mass residential prices dropping up to 10 per cent.
Developers accelerate as Hong Kong housing sentiment improves
26th July 2016
Developers are accelerating activity in Hong Kong, as housing sentiment improves.
Government data showed that property prices rose in April and May 2016, with values up 0.73 per cent month-on-month. Now, house-builders are speeding up the launches of new projects.
“Developers are expected to rush to offload their stocks in the second half as they have failed to meet six-month sales targets, plagued by the declining desire to buy, and poor market sentiment,” Derek Chan, head of research at property agent Ricacorp Properties, tells the South China Morning Post.
Ricacorp estimates that as many as 2,500 new units could be launched this month – around 40 per cent of the first-hand homes sale in the first half of the year. Some are concerned, though, that the rush to attract buyers could fuel further incentives from developers, which could also drag the sector back down.
“We are monitoring for any price war between developers,” Chan comments.
Hong Kong developers offer discounts to draw buyers
25th May 2016
Hong Kong developers are increasingly offering discounts to draw buyers away from the existing home market.
The market for new units in Hong Kong is tough at present, following the yuan’s development at the start of 2016 and the stock market fluctuations, which deterred buyers from the market in general. Indeed, developers have deferred the marketing of some projects until more favourable conditions.
In the first five months of the year, though, companies enjoyed strong sales volumes, with developers racking up HK$44.6 billion in sales of new homes – making up 44 per cent of the total transaction value in the residential market, according to Midland Realty. This is the first time this has happened in 13 years.
This growth was largely fuelled by growing sales of luxury properties, however. Notable deals included Sun Hung Kai Properties’ Ultima phase two, in Ho Man Tin, where units were sold for between HK$18 million and HK$135 million. Overall residential sales, including both new homes and existing homes, totalled HK$102.3 billion between January and May 2016.
Buggle Lau, chief analyst at Midland Realty, tells SCMP that the overall number of transactions declined, with the sales that did take place due to discounts and favourable mortgage offers. Of the total 13,950 sales, new homes made up just 23.6 per cent, down on last year’s 29.1 per cent. Nonetheless, new homes have become more popular than they were in the immediate aftermath of the global financial crisis: in 2008, new-build units made up just 9.2 per cent of total residential transactions.
“There will be bigger new projects scheduled to come to the market,” comments Lau. “Sales of new homes will pick up as long as developers continue to offer discounts and mortgage schemes to entice buyers.”Google+