Hongkongers come out in droves to buy property even as developers steadily raise prices amid improving confidence

Yujing Liu
·3-min read

Hong Kong homebuyers snapped up dozens of new flats on Sunday, in a bumper weekend of home sales amid easing fears over a fourth wave of the coronavirus outbreak and resilient demand from first-time homebuyers.

Hong Kong Ferry Holdings and Empire Group had sold 85, or nearly 70 per cent, of the 123 flats on offer in the second phase of Starfront Royale in Tuen Mun as of 8pm, agents said. More than 3,600 people registered for a lottery to buy the flats, translating into 29 buyers vying for each available unit.

“Buyers’ purchasing power has been unleashed since the coronavirus outbreak has been largely brought under control,” said Sammy Po Siu-ming, chief executive of Midland Realty’s residential division. “The overall low-interest-rate environment has also contributed to an abundance of cash in the market.”

Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.

The interest in the latest batch of flats was much higher than the first round of 248 units sold a week ago, even after the developer raised the average price by 3.1 per cent to HK$15,384 (US$1,984) per square foot from HK$14,928 for the previous batch. Last week’s sale attracted about 4,000 registrations of intent, or 16 buyers for one unit.

More than half of the flats in Sunday’s sale were one-bedroom units, with the rest ranging from studios to two- to four-bedroom flats. Prices ranged from HK$3 million to HK$14 million for each unit.

The successful sale came a day after rival New World Development (NWD) recorded its third sell-out weekend at The Pavilia Farm in Tai Wai, New Territories. The developer sold all 337 units on offer on Saturday at an average price of HK$19,800 per square foot.

Following the sell out, late on Saturday NWD released a price list for another 343 new flats in the project’s second phase, without announcing a launch date. The average price for the flats has been increased by 3 per cent to HK$20,399 from the previous batch, which was already 5 per cent more expensive than the first batch sold in early October.

The new projects’ uptake points to a resilience in the mass-market residential property segment in an otherwise gloomy real estate market in Hong Kong this year, as demand from first-time homebuyers remains strong despite the coronavirus outbreak triggering the worst economic recession in the city’s history. Secondary home prices, tracked by the Centa-City Leading Index, were little changed by the end of October from levels seen at the beginning of this year.

Last week, some 4,000 investors had registered for a chance to buy one of 248 units on offer at the Starfront Royale. Photo: KY Cheng
Last week, some 4,000 investors had registered for a chance to buy one of 248 units on offer at the Starfront Royale. Photo: KY Cheng

A low-interest-rate environment globally – the result of historic liquidity injections unleashed by central banks around the world in response to the pandemic – has added to the appeal of property assets, as they retain value in the long term. It also means lower mortgage costs for first-time buyers.

Property developers are set to launch many new projects in November, as the first-hand residential property market starts to recover in terms of transaction volume in the fourth quarter from the impact of lockdowns and social distancing measures.

More than 3,000 units are set to come on the market this month, based on agents’ projections, compared with the 1,475 new flats that were sold in October.

More from South China Morning Post:

This article Hongkongers come out in droves to buy property even as developers steadily raise prices amid improving confidence first appeared on South China Morning Post

For the latest news from the South China Morning Post download our mobile app. Copyright 2020.