Surging prices force Hong Kong’s second-hand flat hunters to make instant decisions
Hong Kong’s skyrocketing property prices are pushing flat-hunters in the secondary market to quicken their purchase decisions.
Many buyers are so eager to get in before the surging market leaves them behind, they are signing on the dotted line within minutes of viewing a property, say agents. And they are often basing their decision on the strength of a photograph, rather than actually visiting the apartment in person.
With prices in some new projects shooting up by 20 to 40 per cent in the space of less than a month, more and more home-seekers are flocking to the secondary market.
“Young and single first-time buyers accounted for about 30 per cent of our deals since last month. Most of them failed to buy a studio or one-bedroom flat in recent project launches as developers increased prices in every new batch of units put on sale,” said Richmond Wong, assistant district manager at Ricacorp Properties’ Yuen Long branch.
“We have seen prospective buyers agree to buy in just 15 minutes, or even proceed to purchase without viewing the flats as long as the apartments are being offered within their budget.”
These prospective buyers are targeting flats being offered in the price range of HK$3.5 million to HK$6 million, he said.
“Most of them come from Kowloon and Hong Kong Island where it’s increasingly difficult to find a studio flat for less than HK$4 million. They are happy to see a wider choices of studio flats at two-year-old projects with recreation club facilities within their affordability,” said Wong.
For instance, a 272 square foot flat at Park Signature in Yuen Long costs about HK$3.5 million, while a one-bedroom, 400 sq ft flat comes in below HK$5 million and a two-bedroom, 500 sq ft unit is priced at less than HK$6 million.
In many cases, buyers in the secondary market are making their decision without physically seeing the apartment they want because it is occupied by tenants, making an immediate viewing impossible.
Amy Chan, a sales manager at Many Well Property Agency, said the firm recently helped a first-time buyer purchase a 312 sq ft unit at Hoi Tak Garden, Tuen Mun, for HK$3.31 million, or HK$10,609 per sq ft.
“The client decided to buy right after seeing the photo of the unit because other apartments of the same size are being offered for HK$3.8 million,” she said. “This one cost less as the unit is occupied by a tenant so a viewing was not possible.”
In Tsuen Wan, a three-bedroom, 547 sq ft apartment at the 26-year-old Waterside Plaza sold for HK$5.98 million, or HK$10,932 per sq ft, said Yau Hon-wai, district manager at Centaline Property Agency’s Tsuen Wan branch.
“The unit was sold within 24 hours after the owner put it on the market,” he said. “Home seekers will not spend time bargaining with the owners now as they know others will take it if they don’t act fast.”
The secondary market remained active during the Easter Holiday break, as more viewing appointments were arranged than in the previous week, he said.
“Deals are closing at lightning speed in the case of units that provide a good sea view and have decent interior decor because new flats in the area are beyond a lot of people’s budget,” he said.
Prices of flats in new developments have surged in recent weeks as demand continues to defy cooling measures.
Pavilia Bay, a new project jointly built by New World Development and Vanke Property in Tsuen Wan, saw a 421 sq ft, one-bedroom flat on the 56th floor sell for HK$9.6 million, or HK$22,815 per sq ft, on April 1, setting a record for such a unit in the development.
Centaline Property Agency expects new home sales will continue to dominate Hong Kong’s residential market this month.
Month-on-month transactions in the primary market will increase 75 per cent to 2,500 deals in April while sales in the secondary market are likely to fall 6.8 per cent to 3,800 deals, it said.