Supply of Hong Kong flats below HK$3m drops

Rising prices mean affordable homes are disappearing, leaving buyers with few options

PUBLISHED : Tuesday, 16 September, 2014, 11:27am
UPDATED : Wednesday, 17 September, 2014, 5:32am

The number of flats being offered at or below HK$3 million is declining sharply as Hong Kong home prices keep on climbing to fresh highs, leaving potential buyers with a tight budget little choice but to settle for either ageing properties or tiny flats in old districts.

Sammy Po Siu-ming, chief executive at Midland Realty's residential department, said it was nearly impossible to buy a new flat with this budget except the tiny apartments at Cheung Kong's Mont Vert in Tai Po.

"It will be hard to find one at major housing estates. There are still some units at single residential blocks in the New Territories that are selling at this price category but choices are limited," he said.

In the controversial sale of the Mont Vert, there were more than 20 studio units with a size of 177 square feet to 180 sq ft which were sold for about HK$2 million since their launch early this month.

Po said units offered at HK$3 million or below in the private residential market would likely be in properties that are more than 20 years old in Yuen Long, Tuen Mun or in Tsuen Wan.

Wealth Property, a realtor focused on mass homes in Tsuen Wan, Kwai Chung and Sha Tin, said the number of units at this budget has fallen significantly because most owners have raised their asking prices in line with the escalation in home prices.

"There are only a few available for sale this month," according to an agent at Wealth Property.

She said there is a 400 sq ft flat at the 40-year-old Tak Yan Lau building on Tai Pa Street, just across from the Tsuen Wan Plaza shopping centre, being offered for HK$2.6 million with leases.

She said the unit on the fifth floor has been subdivided into three rooms and now generates a monthly rental income of about HK$8,000 per month.

The building has no lift.

Another is a 450 sq ft flat at Good View Building on Heung Wo Street, Tsuen Wan, being offered for HK$3 million, she said.

For these old properties, she said buyers could only receive mortgage loans of 50 per cent of the flat's value.

Last month, the number of units sold at or below HK$3 million was 930, or 22 per cent of the 4,183 total transactions in the secondary residential market, down from 35 per cent in November last year.

Lik Ma, an agent at Centaline Property Agency's Kingswood Villas branch in Tin Shui Wai, said prices for two-bedroom flats of about 440 sq ft in Kingswood Villas have risen to more than HK$3 million, from HK$2.6 million six months ago.

"There are only 80 such units put on sale but the asking prices increased to HK$3.2 million to HK$3.4 million each. The units available for sale in Kingswood Villas are 80 per cent fewer than before the double stamp duty was introduced in February last year," said Ma.