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Record number of homebuyers walk away from Hong Kong property purchases amid rising jobless rate, pay cuts due to Covid-19
- Buyers have walked away from 47 deals this month, taking the total this year to 380, the highest since record-keeping started in 2013
- Buyers have forfeited around HK$6.8 million on 13 units at The Pavilia Farm and HK$16 million on 13 units at the Grand Yoho
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The number of homebuyers reneging on flat purchases this year has reached an all-time high as the Covid-19 pandemic casts a shadow on the city’s economy, pushing the unemployment rate up and forcing many companies to implement pay cuts as they struggle to stay in business.
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They have walked away from 47 deals this month alone, taking the total so far this year to 380, the highest since 2013 when record-keeping first started. Last year’s cancellations stood at 335 versus 160 seven years ago.
“The changing economic fortunes of new buyers due to the Covid-induced recession, could mean the number of reneged purchases continues to increase,” said Will Robertson, executive director at Nest Property.
New World Development saw buyers forfeit around HK$6.8 million (US$877,000) on 13 units at The Pavilia Farm in Tai Wai this month. Sun Hung Kai Properties also saw 13 cancellations amounting to some HK$16 million in the second phase of Grand Yoho in Yuen Long in November.
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The impact of the coronavirus pandemic has kept Hong Kong’s unemployment rate at a 16-year high of 6.4 per cent, with some 257,800 people without work between August and October. Last month Cathay Pacific laid off nearly 6,000 employees in Hong Kong, the biggest in the airline’s history. There are fears that after the government’s HK$81 billion wage subsidy scheme comes to an end in November, the jobless rate could rise even further.
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