Hong Kong developers rush sales as buying momentum builds, while city enjoys lull before security law storm

Home sales more than doubled in May from April to a one-year high as pandemic restrictions are eased

‘No one knows what will happen later this year as too many variables may affect the market sentiment,’ DBS says

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Homebuyers seen lining up for Wetland Seasons Park project sales at International Commerce Centre at Kowloon Station on May 30. Photo: Jonathan Wong

Published: 8:43am, 10 Jun 2020Updated: 8:53am, 10 Jun 2020

Hong Kong developers are expected to price their new projects at lower levels as they rush to capture a revival in buying interest as the government eases measures to control the coronavirus pandemic, according to analysts.

New home sales surged in May to 2,085 new units worth HK$22.1 billion (US$2.85 billion), the highest in a year, according to data provider Dataelements. That is also more than double the business in April, and an almost five-fold jump over February when the market hit a multi-year low of 340 units.

“Builders will chase after volume instead of holding out for higher selling prices as the Covid-19 outbreak comes under better control now,” said Joseph Tsang, chairman at JLL Hong Kong. “New projects will be launched at lower prices in the first batch to draw eyeballs.”

Hong Kong’s government eased pandemic measures from May 8, allowing public gatherings in groups of eight, widening the rule from four in a March 29 pronouncement in a thumbs up for the stricken economy. In the latest move on June 8, it will exempt eligible executives from the 14-day quarantine rule, subject to application and quota.

The recovery momentum, however, is being tested in the coming weeks by Beijing’s introduction of a national security law tailor-made for Hong Kong. The legislation could reignite unrest that helped push the economy into a recession.

There are also overriding concerns about how it will further stoke the US-China tensions, with Hong Kong caught in the political fault line. Some of the city’s richest developers and biggest companies have publicly backed the legislation.

People lining up for Wheelock's Ocean Marini at the sales office at the Harbour City in Tsim Sha Tsui on May 16. Photo: Nora Tam

Home prices in Hong Kong have slipped 5.3 per cent from the peak in May, according to official data, enticing buyers who have held back big-ticket purchases through months of social unrest and this year’s viral outbreak. JLL expects prices to ease by as much as 20 per cent this year.

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