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Potential homebuyers line up at MinMetals Land’s sale office at One Pacific Centre in Kwun Tong for the Montego Bay project on 5 December 2020. Photo: Xiaomei Chen

Hong Kong’s strict Covid-19 social distancing rule spoils mood for homebuyers, bringing streak of sell-out weekends to an end

  • MinMetals Land, the real estate subsidiary of one of China’s largest metallurgical producers, sold 60 of 161 apartments at its Montego Bay project in Yau Tong as of 5:30pm
  • In Yuen Long, Road King failed to find a single buyer for the 51 flats at its Crescent Green project

Hong Kong’s streak of sell-out weekends of residential property ended when two developers sold fewer than a third of the combined 212 flats on offer in two districts, as the city’s strictest social distancing measures to date dampened sentiments.

MinMetals Land, the real estate subsidiary of one of China’s largest metallurgical producers, sold 60 of 161 apartments at its Montego Bay project in Yau Tong as of 5:30pm, sales agents said. In Yuen Long, Road King failed to find a single buyer for the 51 flats at its Crescent Green project.

The dismal result followed a surge in coronavirus pandemic infections in Hong Kong, which kept more potential buyers at home and away from the sales venue, said Midland Realty’s residential division chief executive Sammy Po. Earlier in the week, city authorities tightened social distancing rules to contain the spread of the disease, limiting public gatherings to only two people at a time.

Hong Kong reported 101 confirmed infections on Saturday (yesterday), bringing the city’s total accumulated tally to 6,802 cases since the outbreak began, with 112 fatalities.

“More people are choosing to stay at home amid the tightened social distancing measures, so it’s not surprising that home sales have turned sour,” Po said. “The fourth wave has made people worried.”

MinMetals Land’s Montego Bay project under construction at 18 Shung Shun Street in Yau Tong on 20 November 2020. Photo: Winson Wong
The sales slump was a blow to developers, who had reported several consecutive sell-out weekends in October and early November when daily cases of new infections fell in Hong Kong. New World Developments, one of the city’s largest developers, sold almost 2,100 flats at The Pavilia Farm project in Tai Wai within two months of launching, for a total haul estimated at HK$23.8 billion (US$3.07 billion).
MinMetals Land had a fleeting taste of success before Hong Kong’s latest social distancing rules, finding buyers for 93 per cent of the first 279 flats released for sale at Montego Bay last weekend. Prices at the first batch of Montego Bay started at HK$4.9 million, or HK$15,964 per square foot, going up to HK$18.5 million with a 20 per cent discount. The apartments start from 271 square feet for one-bedroom flats to three-bedroom units measuring 832 sq ft.

In response to the worsening fourth wave, Hong Kong’s government restricted public gatherings to only two people at a time, reduced restaurant dine-in hours, closed more entertainment venues, and instructed civil servants to work from home. Local authorities raised the fines for non-compliance and even set up a hotline for the public to report offenders.

Agents at real estate sales rooms were also required to observe social distancing, and are limited to two customers per agent, with one and half metres between every consultation cluster.

“Developers will slow down their marketing efforts this month,” said Derek Chan, head of research at Ricacorp Properties, adding that Henderson Land Development, Wheelock Properties and Chinachem have postponed their sales launches. “They may not start the sales arrangement next year.”

That would make December a slow month, with 1,300 homes changing hands in the whole city according to Chan’s estimates, half of November’s sales. Next year could see an improvement in the housing market, as more first-home buyers are likely to take advantage of low mortgage rates to commit to their first big-ticket purchases, analysts said.

“There is a lot of capital flowing in the markets and interest rates remain low, so prospective buyers will continue to enter the market once the current outbreak is under control,” said Chan.

This article appeared in the South China Morning Post print edition as: Flat sales fizzle as stricter social curbs hit sentiment
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