Midland says Hong Kong’s property doldrums will remain through the first half as Covid-19 weighs on buying sentiment for real estate

Midland Holdings said Hong Kong’s social distancing policies would weigh on property market sentiment through the first six months, after the city’s sole publicly traded real estate agency posted its third annual profits slump in four years.

Net income fell 24 per cent to HK$100 million (US$12.8 million) last year, without the one-off employment support scheme that had helped it swing to profit in 2020. Revenue, 99 per cent contributed by agency fees, rose 20.5 per cent to HK$6 billion, the company said in a statement to the stock exchange.

Hong Kong is going through the city’s worst Covid-19 outbreak, with 26.6 deaths per million residents as of March 24, placing the city among the world’s highest mortality rate. Social distancing rules to contain the disease had paralysed most business activities, deterring developers from launching their weekend sales campaigns.

“Developers have not been active, postponing the launch of new projects while placing their focus on clearing their inventories,” Midland’s deputy chairman Angela Wong Ching-yi said in a statement, adding that transactions are likely to stay low in the first quarter. “As for the secondary market, some buyers prefer to stand on the sidelines and many sellers have chosen not to allow property inspections to minimise the risks of [Covid-19] infection.”

New launches shrank 83.3 per cent in the first two months of the year to 457 units, Midland said.

Total property transactions, including homes, shops, industrial units and car parking space, shrank to 13,415 deals valued at HK$122.6 billion from January to March 29, 41 per cent lower than the first quarter of 2021, according to Midland’s data.