Sales of luxury Hong Kong homes plunge to three-year low, with ‘cashed-up’ buyers not in the mood for big-ticket purchases

Overall sales of homes costing HK$20 million or more fell 34 per cent from January to November year on year

Cashed-up purchasers have the financial ability, but they are just not in the mood to buy in the current market conditions, agent says

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Hong Kong developers will speed up the sale of luxury projects next year, amid rising competition for buyers, Centaline says. Photo: May Tse

Published: 8:15am, 17 Dec 2019Updated: 8:26am, 17 Dec 2019

The sales of luxury homes in Hong Kong plunged to a three-year low in the first 11 months of 2019, with fewer local and mainland Chinese buyers willing to commit to big-ticket purchases since June, when the city’s anti-government protests started.

The overall sales of homes costing HK$20 million (US$2.56 million) and above, including new and old properties, fell 34 per cent to 2,752 deals from January to November year on year, according to Centaline Property Agency. The value of transactions dropped 30.6 per cent to HK$133.7 billion over the same period, the consultancy said.

“A client who was keen on buying a luxury home in Tai Tam visited the unit at 8am, 5pm and 8pm on different days. He decided to defer the purchase after the US passed the Hong Kong Human Rights and Democracy Act in November,” said Jacky Chan, an agent at Centaline’s Mid-Levels branch.

The city has been rocked by seven months of anti-government protests, he said, which had held back some buyers, who believed home prices would fall further. “These cashed-up purchasers have the financial ability, but they are just not in the mood to buy in the current market conditions,” Chan said.

Derek Chan, head of research at Ricacorp Properties, also attributed the tumble in luxury home sales to fewer mainland Chinese buyers, who are a major buying force. “The violent social movement has scared them over the past seven months,” he said.

Visitors from mainland China plummeted to 2.5 million arrivals in October, down 45.9 per cent from the previous month, according to the Hong Kong Tourism Board. Altogether, there were 3.31 million arrivals in October, a decline of 43.7 per cent from the same month in 2018, the board said.