New flat sales in Hong Kong at 15-year high as developers offer deep discounts amid protests, impending vacancy tax
- Homebuyers splashed out HK$214 billion on 20,042 new flats in the first 11 months of the year
- Average home price fell 26.8 per cent to HK$10.67 million from record HK$14.69 million in 2018
Homebuyers spent HK$214 billion (US$27.3 billion) on more than 20,000 new flats in the first 11 months of the year, the most since 2004, as developers rushed to offload stock because of the impending vacancy tax and uncertain market outlook, according to Ricacorp Properties.
“The average price has fallen this year as developers launched new projects with smaller units at deeper discounts, particularly in second half when market sentiment turned sour,” said Derek Chan, head of research at Ricacorp.
CK Asset Holdings, Hong Kong’s second-largest developer, launched its first new property project of the year in October at discounts of as much as 10 per cent, bowing to a stalling market that had been rattled by four months of unprecedented street protests.
Developers have also sped up flat sales because of the soon-to-be introduced vacancy tax. The government proposes to impose a tax of 5 per cent of a flat’s value if a unit is left empty for six months after receiving an occupation permit, to stop developers from hoarding completed but unsold property, and to ease the city’s housing shortage.
Hong Kong home prices extend rout in October as protests escalated and economy mired in recession
In 2004, 25,436 new flats were sold from January to November compared to 20,042 units this year, according to Land Registry data compiled by Ricacorp.
Meanwhile, the number of new flats sold jumped 54 per cent month on month in November to 2,091, while value rose 17 per cent to HK$19.7 billion.
In the New Territories, 1,399 new flats were sold last month, a nearly 200 per cent increase from the 473 in October. This was mainly due to the sale of more than 500 flats in The Grand Marine project in Tsing Yi, Chan said.
Sales of new flats on Hong Kong Island jumped to 89 from 31 in October, while in Kowloon sales dropped 29 per cent to 603 in the comparable period.
Separately, Thomas Lam, executive director and head of valuation and advisory at Knight Frank, said that he expected the average home price next year to drop by 8 per cent from its peak in May.
He also expected overall transaction volume of new and second-hand homes to reach 60,000 for 2019, the same as last year.