Hong Kong records worst weekend sales of homes since June as intensifying violence keeps buyers away

Sandy Li

Potential buyers of Chinachem Group’s Sol City phase two development in Yuen Long are seen at the sales office at Nina Tower in Tsuen Wan, on October 28, 2018. Photo: Edward Wong

Hong Kong residential property sales on Sunday recorded their worst performance since the social unrest started in June after buyers stayed away amid intensifying protests.

Only four out of 144 units at Chinachem Group's Sol City development in protest hotspot Yuen Long were sold as of 6pm, according to agents. Less than 10 potential buyers were at the sales office at Nina Tower in Tsuen Wan when sales commenced at 10am.

Another new project, Crescent Green, launched by Road King Infrastructure in the same district on Friday fared poorly as only 29 out of 67 units were sold.

Two weeks earlier, on November 2 and 3, only 35 per cent of 435 units offered by five developers found buyers.

Hong Kong's homebuyers greet developers' attempt to sell leftover residential property with their collective cold shoulder

"Most of the clients are in no mood to venture out because of safety concerns and traffic disruptions as the clashes between protesters and police have escalated in the past few days," said Sammy Po, chief executive of Midland Realty's residential department. "It is the poorest weekend sales performance since June."

The disappointing sales came even after Chinachem raised the discount to 13.5 per cent from 7 per cent for buyers who opt to complete the deal after the project's likely completion in July, to help them take advantage of the relaxed mortgage lending rules and compete with the secondary residential market. The discount for cash buyers is slightly higher at 15 per cent.

Construction on Chinachem Group's Sol City residential project in Yuen Long as of July 2018. Photo: Roy Issa

Chief Executive Carrie Lam Cheng Yuet-ngor in her policy address last month announced an easing of mortgage lending rules to help first-time buyers get on the property ladder in the world's most expensive market to own a home. According to the new rule, applicants will receive 80 per cent loans for completed flats valued at up to HK$10 million and 90 per cent for flats worth up to HK$8 million.

For instance, a 389 square feet unit at Whampoa Gardens in Hung Hom on the market for HK$7.2 million now requires HK$720,000 or 10 per cent of the flat's value as down payment. Previously buyers would have to set aside HK$2.88 million or 40 per cent as down payment.

Since the easing of the mortgage rule, there have been encouraging signs of buyers coming on to the market to purchase used homes.

Wong Leung-sing, senior associate director of research at Centaline Property Agency, said that he expects the relaxed mortgage policy to boost secondary residential property transactions this month to the highest level since July.

Centaline expects the number of deals to jump 41 per cent month on month in November to 3,400 and the value to increase 32 per cent month on month to HK$28 billion.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.

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