Hong Kong’s housing market had its most downbeat Year of the Rat since records began in 1996, amid the outbreak of the novel coronavirus. Analysts, however, expect a more active market in the Year of the Ox, when the pandemic eases – despite an ongoing recession in the special administrative region’s economy.
The number of overall property transactions in the Year of the Rat, at 78,352 as of February 9, was lower than the last two Years of the Rat, according to data from Ricacorp Properties. The number has, however, risen by 8 per cent during the past lunar year. There were 93,956 transactions in 2008 to 2009 and 166,976 in 1996 to 1997. The Year of the Ox, which comes after the Year of the Rat in the Chinese zodiac, started on Friday last week.
“Affected by the pandemic and housing market policies … [while] the primary market was downbeat, the secondary market had a boom in the Year of the Rat,” said Derek Chan, head of research at Ricacorp. “In the coming Year of the Ox, [we] anticipate that the vaccines will be effective, leading to a market recovery and a belated jump in both transaction volumes and prices.”
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Transactions involving lived-in homes recovered by 24 per cent to 50,876 in the Year of the Rat, thanks to a relaxation in mortgage restrictions. The primary market, however, recorded a plunge of 21 per cent, with the number of transactions falling to 16,397, as developers delayed property launches amid the coronavirus and Hong Kong’s worst recession on record.
Chan said he expected the number of overall transactions, which includes both residential and non-residential properties, to jump by about 10 per cent to 83,600 in the Year of the Ox.
In fact, Hong Kong recorded sales of 22 new homes in the first three days of the new year, the highest since 2013, according to Midland Realty. This compares to just two in the same period this past Year of the Rat, when the coronavirus outbreak and concerns about market prospects first emerged.
In the past few days, sales have mainly been reported at projects by Henderson Land Development, thanks to cash rebates of up to HK$48,800 (US$6,295) on buying certain flats and other perks.
Midland said the number of new homes sold this month might hit 1,200, the highest for the Lunar New Year month in four years, as Hongkongers are still not able to travel.
The secondary market also reported a higher turnover in the first four days of the Year of the Ox. For instance, in Tung Chung, there were seven transactions, compared to just one in the Year of the Rat, as potential buyers who are unable to travel returned to visit listed properties, Centaline Property Agency said.
Meanwhile, home prices will sustain an upward trend during the Year of the Ox, according to Centaline. The agency’s home price index, Centa-City Leading Index, dipped 0.3 per cent in the Year of the Rat to 176.53 in the last week. But it has rallied to a five-week high in the latest reading, after a three-week losing streak.
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