Flat buyers play waiting game
Hong Kong property owner and investor Susanna Chow is poised to re-enter the market.
'I will buy when prices fall about 20 per cent,' said Chow, who has been monitoring the price movement of 500 sq ft units in New Kwai Fong Gardens at the Kwai Fong MTR station.
She is waiting for landlords to lower price tags on these small units from their present level of about HK$2.3 million to below HK$2 million - and she expects this to happen.
'Property is a good investment against inflation and I believe home prices eventually will go up,' said Chow, who lives in a government-subsidised unit in Kwai Chung.
She also owns a small holiday home on Lantau and is renting out another small unit in Kwai Chung for HK$5,000 a month.
'I want to buy more. My plan is that when I retire, I can rely on the rental income of my properties to sustain my living standards,' said Chow, who works in the education sector.
That attitude was becoming typical of many buyers and investors, said Patrick Chow Moon-kit, head of research for estate agency Ricacorp Properties.
Would-be buyers were waiting for bargains in the wake of the current market consolidation, he said. 'Demand is still there, but they will enter the market only if landlords are willing to cut prices.'
This explained why the number of sales had declined in for four consecutive weeks, and then showed a rebound last week, Chow said.
Sales data compiled by Ricacorp showed that the number of preliminary sales agreements fell from 500 in the week of April 12 to 18, to 285 in the week from May 10 to 16. But deals rebounded to 345 in the latest week, May 17 to 23.
The increase came after some landlords cut prices, he said.
Chow expects prices will fall another 3 to 5 per cent before finding support.