Price rises of major new Hong Kong housing estates expected to slow in 2017, say agents
Supply of new flats coming onto market reaches its highest level since 2005.
Rising prices at major housing estates in Hong Kong may slow in 2017, as the supply of new flats coming to onto the market reaches its highest level since 2004.
A crop of ongoing residential projects – including Kingswood Villa in Tin Shui Wai, Sha Tin City One in Sha Tin, Whampoa Gardens in Hung Hom, Metro City in Tsueng Kwan O and both Kornhill development and Taikoo Shing in Quarry Bay – saw their prices jump 9.4 to 20.7 per cent on average in the 12 months to November, according to 50 housing estates monitored by Ricacrop Properties.
Kingswood topped the chart as prices soared 20.7 per cent to HK$8,221 per square foot on average, while Taikoo Shing registered a year on year 9.4 per cent rise to HK$15,942 per sq ft on average.
“But price movements in the secondary residential market will be directly affected by new project launches in nearby areas,” said Derek Chan, head of research at Ricacrop Properties.
Chan said new supply will climb to a 12-year high with a potential 33,891 new flats coming onto the market this year – 12.1 per cent higher than the 30,220 in 2016.
He added individual sellers in the secondary market will also face huge competition from developers who have the financial strength to offer new flats with an array of incentives to lure potential buyers,” he said.
Sun Hung Kai Properties will be the first developer to offer a new project for sale this year by releasing 66 flats at Grand Yoho in Yuen Long for pre-sale on Thursday.
Adam Kwok Kai-fai, an executive director at the company, also said around 30,000 new units are expected to be listed in Hong Kong in 2017, the highest number in recent years.
At a press briefing on Tuesday, Kwok said developers in Hong Kong face a tough year ahead, although he expected SHKP to fare well, given its strong brand awareness.
“It will be hard to sell properties this year,” Kwok said. “There are set to be a rise in interest rates. We can expect some new ‘spicy’ measures to control the market. And supply is high.”
Kwok said the large number of new flats flooding the market was a result of increased land supply for Hong Kong’s private housing market.
“Politics aside, the current government has made big progress in boosting private housing supply,” he said. “But I know the supply of public housing is far from meeting its targets.”
As marketing schedules are still subject to the application of the government’s pre-sale consent and developers’ final decision, Ricacrop’s number of new flats put on sale may reduce to 18,500.
But that will be still be 18.4 per cent more than 15,600 in 2016, it said.
Chinachem’s director of sales Ng Shung-mo said it is sticking with its plan of releasing its new Parc City development, which comprises 953 units, next to West Rail’s Tsuen Wan West Station, in the second quarter.
“We have submitted our application for the pre-sale consent and are awaiting approval,” he said.
Assuming all the estimated 33,891 new apartments put up for pre-sale this year sell, it said the New Territories would account for 59 per cent of all total units put on the market.
More than 20,000 flats from 45 new projects located in New Territories could be put on sale, it said.
Louis Chan, chief executive of Asia Pacific (residential) at Centaline’s residential department, said a lot of potential buyers will have no choice but to go for new flats, even if developers price them at a premium to the secondary market.
“As developers offer lower initial down payments, competitive prices and attractive payment terms, prospective buyers will no doubt flock to the primary market if they want to pursue home purchases,”