Flat prices fall on economic fears
Sellers have begun cutting their asking prices for Hong Kong properties in response to growing uncertainty over the global economic outlook - creating new opportunities for buyers who until now have been priced out of home ownership.
Across the board, sellers have begun offering discounts on their asking prices of between HK$100,000 and HK$1 million as they bid to secure quick sales, agents say. Prospective buyers who previously found home ownership beyond their reach were being lured back into the market by the wave of discounting, they said.
But while sellers had finally succumbed to market forces and were far more willing to negotiate, there was no evidence of widespread panic in the market, agents said.
In Mei Foo Sun Chuen, the owner of an 890 square foot flat cut his asking price of HK$5.45 million by HK$300,000 in response to the turmoil in global financial markets, said David Yau, senior district sales manager in Midland Realty's Mei Foo Sun Chuen office.
'The vendor revised his asking price after a month of failing to attract bids,' said Yau. Another flat of a similar size on a lower floor was now being offered at HK$4.7 million, down from HK$5 million previously.
'It is becoming more difficult to conclude deals as prospective buyers hope to hammer down prices more and some vendors prefer to offer their flats for rent instead of dumping them at a big price cut,' he said.
Tody Yeung, a senior consultant in the Tseung Kwan O branch of estate agency Ricacorp Properties, said adverse market sentiment prompted some owners to cut asking prices by four to eight per cent. A 765 sq ft flat at La Cite Noble was now being offered at HK$4.3 million, he said, down from its original price of HK$4.5 million. 'There is now more choice for prospective buyers as an increasing number of units are being offered at lower prices compared to last month,' he said.
The discounting under way in the market had taken prices at The Metro City to below HK$3 million.
In Tin Shui Wai, a vendor reduced the asking price for his 579 square foot flat at Chestwood Court, in the third phase of the Kingswood Villas development, by six per cent, or HK$100,000, to HK$1.7 million. 'About 40 per cent of owners in Tin Shui Wai are now cutting prices, with some sellers offering discounts of up to 10 per cent,' said Man Ka-fai, sales manager at Ricacorp Properties' Central Park Towers branch in Tin Shui Wai.
Prospective buyers with deeper pockets looking at pricier flats could bargain for even bigger discounts, since these transactions involved larger lump sums, said agents.
A 3,257 square foot flat at Residence Bel-Air in Pok Fu Lam sold last week for HK$61 million, down 14 per cent from its original asking price and 4 per cent below previous transaction prices for flats of a similar size in the estate, agents said.
'Low borrowing costs will help owners hold out. But whether they will be prompted to cut their prices further will depend on the performance of the stock markets in coming weeks,' said Emily Ha, from Hong Kong Property. She said the prospect of rising inflation could prompt some owners to lease rather than sell.
The amount by which one vendor cut the HK$26 million asking price for his 1,600 sq ft flat at Residence Bel-Air