The sudden tinge of fear among sellers in Hong Kong’s property market
A recent wave of price discounting for both residential and commercial properties indicates a softening in sentiment
Signs of a deepening slowdown are beginning to emerge in Hong Kong’s property market, with anecdotal evidence showing more homeowners and office space owners are slashing prices in a bid to exit the market, even as there are few signs of a broad-based downtrend.
A 282 sq ft flat at Tak Bo Garden in Kowloon Bay sold on Tuesday for HK$4.33 million (US$552,496), or HK$15,355 per sq ft, 8.8 per cent cheaper than an equivalent sized flat in the same area that sold a week earlier. In comparison to a similar unit sold in May, the price was more than 16 per cent lower.
Another homeowner lost more than HK$2.6 million after holding a 1,725 sq ft unit at The Legend in Jardine's Lookout for 11 years. The unit was bought in 2007 for HK$48.6 million and sold on October 9 for HK$46 million, nearly 12 per cent lower than the owner’s original asking price.
“It is the early stage of a bear market already as we see that more homeowners are cutting prices,” said professor Eddie Hui Chi-man from Polytechnic University's department of building and real estate. “If the trade war and interest rate tightening continues, we may see a worse market in the first quarter of 2019.”
Profit-making transactions in the third quarter were at 98.8 per cent, reflecting the lowest reading since the third quarter in 2017, according to data from Ricacorp Properties. The property agent said that 78 home sale transactions in the third quarter were either losing money or just breaking even.