Hong Kong property deals expected to fall 10 per cent in August, with second-hand home sales plunging by a fifth, as Covid-19 risk rattles buyers, sellers
- Social-distancing measures and fear of infection have prevented buyers from viewing used homes on the market, say agents
- Home prices, however, are unlikely to drop significantly as interest rates remain low, says Eric Tso of mReferral
Property transactions in Hong Kong may drop by about a 10th in August, with second-hand home sales leading the way with a 20 per cent plunge, as a third wave of Covid-19 infections deters buyers, according to real estate analysts.
The total number of deals – new and lived-in homes, commercial and retail property – is expected to fall by 10 per cent to below the 7,000-mark, marking two straight months of decline, said Wong Leung-sing, senior associate director of research at Centaline Property Agency.
He estimated property transactions fell 6.7 per cent on a monthly basis in July to about 7,700 while the transaction value slipped 4.7 per cent to HK$67 billion (US$8.64 billion).
“The third wave of the pandemic in the community has led the government to tighten social distancing in recent weeks. This has stopped developers from arranging any large-scale flat sales,” Wong said.
Things look even worse in the case of second-hand residential property. Transaction are expected to plunge by a fifth to 2,800 in August from about 3,500 in July, said Sammy Po, chief executive of the residential division at Midland Realty.
“Buyers do not want to visit other people’s homes amid the health crisis, while sellers don’t want to take the risk of letting people tour their home. It is hard to make a deal,” Po said.
Hong Kong property sales this year have fluctuated in tandem with the timing of Covid-19 outbreaks in the city.
In the first six months, total sales of new flats fell 24.7 per cent to 6,458 deals from the previous half, according to government data.