Home sales in the secondary market have surged 60 per cent this month, triggered by a buying frenzy across the board, with Midland Realty offering generous incentives to lure agents away from rivals to strengthen its sales team.
The sharp rebound in sales and prices prompted Chief Executive Leung Chun-yin on Wednesday to warn he would act to curb property speculation to prevent "over-expansion" of bank credit and ensure the healthy development of the residential market. Home prices have gained 10 per cent since early this year.
Hong Kong Property Services (Agency) data shows there were 2,864 transactions as of August 15, up 60 per cent from the same period last month. The total value jumped 45.6 per cent to HK$12.12 billion.
"Prices for units have increased 10 per cent," said Patrick Chow, head of research at Ricacorp Properties.
He said would-be buyers who had adopted a wait-and-see attitude had rushed in after seeing prices of Home Ownership Scheme flats soar close to the level of the private market.
Patrick Tsang, senior director at Centaline Property Agency's Taikoo Shing branch, said prices for HOS project Kornhill, in Quarry Bay were HK$8,000 per square foot, just HK$2,000 less than for Taikoo Shing.
"It stirred up crazy buying at Taikoo Shing," he said, pointing out there were 13 deals done on Monday alone, compared to 14 for the week of August 6-12. Tsang said 50 units at Taikoo Shing were sold as at Wednesday (August 15), 25 last month and just 16 in June.
"Buyers have to act fast as units with good views and prices will be sold within hours. Flats sold like hot cakes in most districts," he said.
Tsang said one investor decided to sign up without viewing the flat because it was occupied by a tenant.
The 700-square-foot unit at Taikoo Shing sold for HK$7.18 million, he said. The unit was leased for HK$17,500 a month, representing a rental return of 3.5 per cent.
Tsang said prices at many estates had fetched record prices in the past two days. For instance, average prices at Taikoo Sing - the most active trading blue-chip housing estate - rose to HK$11,000 per square foot, while City Garden, North Point, saw HK$9,662 per square foot.
The frenzy has also spread into the mass housing sector, with a unit at Amy Garden in Kowloon Bay recently selling for a record HK$7,071 per square foot and a flat at Tai Po Centre changing hands for a record HK$6,609 per square foot.
Agents said some vendors were requiring buyers produce a 15 per cent initial deposit, up from normal practice of 10 per cent, in order to ensure they would not walk away from the deal. Some buyers also demanded a compulsory sale-and-purchase term in the contract to make sure the owner would not withdraw to take advantage of a further price rise.
To strengthen its sales team, Midland Realty said it would give agents who defected from other agencies HK$9,000 when they met the commission quota for nine months.