Home buying frenzy spills over into Hong Kong’s lived-in, subsidised Home Ownership Scheme flats
- Transactions involving such flats amounted to US$2.3 billion in the first half of this year, the highest since records began in the second half of 1995
- Strong sentiment and rising property prices are driving the brisk turnover of second-hand HOS flats, Centaline executive says
The frenzy came as the city’s economy emerged from its worst recession on record and clocked a 7.9 per cent expansion in the first quarter. The overall prices of lived-in homes have rallied this year to within 0.8 per cent of a record high set in May 2019, with some analysts predicting a 5 per cent to 10 per cent jump for 2021.
The Hong Kong government’s subsidised HOS flats can be sold to buyers eligible for the scheme without paying a premium. If sold in the secondary market to buyers not eligible for the scheme, the sellers must pay a premium set by the government. Most sellers can net a gain even after paying the premium because of the high discounts originally offered by the government.
03:23
Why car park ownership is big business in Hong Kong
Such flats sold for HK$5.41 million on average during the first half, their highest average price since records began in 1996, according to data from Midland Realty. They have also risen 47.7 per cent since HK$3.66 million in 2016, when this rally started.
“With the rebound in home prices, and the significant year-on-year increase in the number of transactions of second-hand HOS flats at a higher price range, the average price of second-hand HOS flat transactions so far this year has risen to a new high,” said Buggle Lau, chief analyst at Midland.
For instance, a 592 sq ft flat at Kornhill Garden in Tai Koo changed hands for a record HK$10.88 million in May, breaking the record of HK$10.68 million set by a similar flat in the same estate in May 2020.
01:39
In Hong Kong’s white-hot property market, even ‘haunted apartment’ prices are rising