Property buyers hunt for bargains in Tung Chung, Tsing Yi and Discovery Bay as Cathay Pacific staff leave Hong Kong
- Anxious property sellers are willing to offer bigger discounts amid shrinking demand
- While sellers are willing to offer discounts of between 3 and 5 per cent, agents expect it to widen by up to 10 per cent as the market deteriorates further
Bargain hunters can expect bigger discounts on property in districts close to Hong Kong airport, as foreign pilots and flight attendants leave the city amid mass lay-offs at Cathay Pacific group.
Market observers say that areas like Tung Chung, Tsing Yi and Discovery Bay that were popular with the airline’s employees could bear the brunt of the downturn. With the airline unlikely to resume full fledged operations until the coronavirus pandemic is brought under control, prices and rents in the area will come under further pressure, they added.
Anxious sellers have cut prices of flats in Tung Chung, the district closest to the airport, by 3 to 5 per cent in the wake of the lay-offs, agents said. They expect prices to decline by up to 10 per cent in the next six months.
Simon Choi, district sales manager at Centaline Property Agency, said that with the government’s Employment Support Scheme about to end, many more sectors might start laying off employees, cut salaries or adjust employment terms, which might further affect the housing market.
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“As the social sentiment is not very good, homeowners’ will not be too assertive and will be open to negotiations or even price cuts,” Choi said.
He noted that prices in Tsing Yi could fall by around 10 per cent in the next two to four month, with sellers in older estates such as Tsing Yi Garden and Greenfield Garden likely to offer larger discounts.
In Tsing Yi Garden, prices of flats measuring 343 sq ft have dropped 18 per cent from HK$6 million at the peak of the market in the middle of last year to just HK$4.92 million this month, added Choi. “As family income reduces and [relative] mortgage burden increases, the entire Hong Kong will be affected, not just Tsing Yi,” he said.
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In Discovery Bay, however, some agents do not expect such steep decline in prices or discounts.
Prices may decline between 3 and 5 per cent in the next six months, said Victoria Allan, founder and managing director of agency Habitat Property. “At present, there may be drop in the higher end market for rents and sales, but I don’t think there will be a drop in the lower [end] market,” she said, adding that there has been a pickup in transaction activity because of more pilots selling.
Meanwhile, renters can also expect bargains in these districts.
Rents in Tung Chung dropped 5 to 8 per cent last week amid the lay-offs, said Alfred Cheung, senior sales manager at Midland Realty. They are now about 25 per cent lower compared to the peak reached in the middle of last year, he added.