Hong Kong’s buyers turn up in droves to snap up discounted new homes as prospect of rate cuts trumps protests and trade war
- Sun Hung Kai Properties and New World Development together sold nearly 88 per cent of the 258 new flats on offer in Tuen Mun and Yuen Long as of 5pm
- The robust sales reversed nearly three weeks of drubbing in the local property industry, and could give developers the confidence to launch more homes for sale
Hong Kong’s property buyers turned up in droves to snap up new flats on sale at two districts across the city, taking solace from dovish interest rate stances by US and local monetary authorities.
Sun Hung Kai Properties (SHK), the city’s largest developer by value, sold 116 units of the 130 flats offered for sale at the second phase of the Mount Regency complex in Tuen Mun, according to agents. Nearby in Yuen Long, New World Development sold 111 of the 128 flats on offer at Atrium House.
Both projects, located to the west of Hong Kong’s New Territories, attracted 10 bids from buyers for each available unit, mostly from young, first-time buyers who were keen to get their hands on flats that cost less than HK$6 million (US$768,000), agents said.
“Small flats for low lump sum prices remain popular in Hong Kong, which is why the two projects reported upbeat sales results,” said Sammy Po, chief executive at Midland Realty's residential department. “Sentiment is turning for the better, and July’s sales number of new flats could climb above 2,000 again, as developers ride the momentum to launch more projects for sale.”
Saturday’s robust sales reversed nearly three weeks of drubbing in Hong Kong’s real estate industry, which was weighed down by the year-long US-China trade war and the biggest street protests in the city’s history over a proposed extradition law.
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Hong Kong developers had cut prices to reboot sales, with Wheelock Properties offering average discounts of up to 5 per cent on 101 flats at the Grand Montara project in Lohas Park in Tseung Kwan O.
Two-bedroom units at New World’s Atrium House project sold for HK$16,266 per square foot on average, while SHK’s Mount Regency were offered at comparable prices. Most of the buyers who showed up were young people buying abodes for themselves, and they shrugged off the impact of Hong Kong’s anti-extradition protests, according to sales agents.
“The trade war has not worsened, and the anti-extradition protests have not affected activities in the housing market,” Po said.
The stellar sales results at Mount Regency and Atrium House could give other developers the confidence to release more projects for sale, helped by expectations that the US and local monetary authorities would cut interest rates in the second half of the year, said Louis Chan Wing-kit, vice-chairman for Asia-Pacific at Centaline Property Agency.
Both Po and Chan estimate this month’s primary home sale could reach 1,500 units, with the sale in the last two weeks of June contributing to most of the sale.
Earlier bearish sentiment has sapped appetite for property investment since the second half of May, with sales volume falling 20 per cent over April. But given the strong rebound of local market in earlier months, Centaline Property estimates that 12,220 new homes with a total HK$130.8 billion would be sold in the first half of 2019.
