Hong Kong’s property sales flopped for the fourth straight weekend, as homebuyers turned their backs on unsold projects to wait for better discounts, amid a real estate slump in the city’s worst economic contraction in decades.
Wheelock Properties sold 13 flats, or 13 per cent of the 101 units on offer at its Grand Marini project in Lohas Park as of 6:45pm, sales agents said. The same project was 90 per cent sold two months earlier, with 18 potential buyers vying for every available unit then.
“These are leftover stock,” said Ricacorp Properties’ associate director Alvin Leung, adding that prices of the latest phase had been gradually raised after the successes of the previous sales. “Buyers are adopting a wait-and-see attitude, in anticipation of CK Asset’s upcoming project” that is expected to launch in the same neighbourhood in June, he said.
The reversal of fortune for Wheelock’s Grand Marini over two months underscores how Hong Kong’s residential property is becoming a buyers’ market, as investors hold out for the best deals amid a glut of choices. The city’s monthly average home price has fallen by 7.6 per cent from its peak in June 2019, tracking the economic contraction that saw Hong Kong’s first-quarter growth shrinking by 8.9 per cent compared with last year, according to the Centa-City Leading Index.
Average home rent had also fallen, as rising unemployment weighed on demand in the residential property market. Average rent fell for nine consecutive months, or by a cumulative 12.1 per cent, to HK$33.3 per square foot in April, according to Centaline Property Agency, which tracks prices in 107 private housing estates across Hong Kong.
Transactions in the world’s most expensive home market slowed to a trickle. The total amount of stamp duty collected, which reflects investment demand in the property market, fell 17.7 per cent in April to a record low of a mere HK$560 million, the sixth consecutive month of declines, according to the Inland Revenue Department.
The number of homes eligible for buyer’s stamp duty, liable for non-local and corporate buyers, also slid for six months to a record low of 41. The number of homes eligible for double stamp duty, liable for those who own at least one home, plummeted 29.5 per cent to a record low of just 105.
A flat measuring 234 sq ft at Lee Bo Building in Tuen Mun sold at just HK$2.35 million recently, 34 per cent below market price and back to 2015 level, according to Ricacorp Properties.
Prices of the latest batch of Grand Marini flats, at HK$16,803 (US$2,167) per square foot, had risen 10.3 per cent since the apartment project was launched in September 2019, putting it further out of sync with the downward trend.
It hadn’t always been like this. The Montara and Grand Montara projects, also developed by Wheelock in the same neighbourhood, sold out during their initial launches in May and June last year. Wheelock’s Malibu project managed to sell all 750 flats over two days in March 2018.
Sales started to stall in August and September last year when anti-government protests started to wreak havoc on the city’s economy and property sales. Wheelock’s Marini sold just 87 per cent of units, and Grand Marini found buyers for 73 per cent of the flats during their initial launch.
CK Asset, one of the city’s biggest developers, is poised to launch its Sea to Sky project, comprising 1,422 flats, in Lohas Park next month.
CK Asset is likely to be joined by Sun Hung Kai Properties (SHKP), Henderson Land Development, Vanke Holdings (Hong Kong), Wing Tai Properties and the Easyknit Group, as they rush to launch new projects after suspending them for two months during the coronavirus outbreak.
The abundance of options will almost certainly lead to discounts. Wing Tai has already discounted the first batch of its Oma by the Sea flats in Tuen Mun by 10 per cent compared with prices of new projects nearby, according to Centaline.
Help us understand what you are interested in so that we can improve SCMP and provide a better experience for you. We would like to invite you to take this five-minute survey on how you engage with SCMP and the news.
More from South China Morning Post:
- Hong Kong mixed development project receives nine bids, but offers will be low, analysts say
- Hong Kong developer loses record US$331.5 million on resale of residential land at Kai Tak as coronavirus darkens market outlook
- Hong Kong property slide divides Wall Street investment banks on recovery outlook for home prices