High prices peg back Hong Kong home sales despite rise in supply
Big run-up in prices leaves owners in no rush to sell and buyers hoping values will fall, a standoff that's caused a drop in deals
Homeowner Winnie Cheung has no intention of profiting by selling her apartment in the blue-chip housing estate of Taikoo Shing in Quarry Bay, even though its value has risen by some 55 per cent to HK$7 million in three years.
"The rapid rise in home prices is a bit crazy," said the young sales executive. "I have several friends who sold their flats but the money they received was hardly enough to buy a similar-sized flat in Taikoo Shing.
"They ended up either buying smaller flats in the same housing estate or moving to a less convenient location."
Cheung and her husband bought a 662 square foot flat in Taikoo Shing for HK$4.5 million, or HK$6,790 per square foot, in May 2009. "Even though the government's move last week to increase flat supplies may bring down home prices, flat values in Taikoo Shing are unlikely to return to the levels they dropped to in 2009," she said.
Chief Executive Leung Chun-ying last week announced a 10-point plan to increase supply to stabilise home prices.
The measures include the sale early next year of 830 Home Ownership Scheme (HOS) flats in Tin Shui Wai that were put on hold because of a short-piling problem in 2000; selling 1,000 flats in Tsing Yi under the My Home Purchase Plan to families earning less HK$40,000 a month at a discount; converting the Chai Wan Factory Estate into public housing to create 180 units; and rezoning for residential use 36 sites designated for "government and recreational" purposes.