Hong Kong developers rushing 800 flats to market as easier Covid-19 rules break lull in home sales
- Loosening Covid-19 restrictions are helping to revive property sales after three months of anaemic sales
- Wheelock Properties raked in HK$3 billion of sales last weekend, showing some pent-up demand for housing
The government removed some social distancing measures from April 21 as health officials put the Covid-19 outbreak under some control, giving businesses a shot in the arm. The local economy may barely grow this quarter, after probably contracting 2.9 per cent in the first three months this year, the University of Hong Kong forecast.
“When the pandemic stabilises, everyone will speed up [sales activity],” said Ricky Wong, managing director of Wheelock Properties. “Developers had no way to do it in the last few months. It was impossible to launch a new project [due to the pandemic curbs],” he added.
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Hong Kong businesses and facilities reopen as many Covid-19 restrictions lifted
Sales of new homes are likely to hit 1,200 units in April, said Derek Chan, head of research at Ricacorp Properties. If so, it will be the busiest month since 1,493 units recorded in December, according to Land Registry data. They could reach a 10-month high of 2,000 in May, he predicted.
Wheelock will sell another batch of 112 flat at the Monaco Marine project in Kai Tak on Thursday, a follow-up to its robust taking on Saturday as homebuyers unleashed pent-up demand in so-called “revenge spending”.
Henderson Land offered 114 units at The Harmonie in Cheung Sha Wan on Tuesday, while arrangements are progressing to launch 188 flats at The Quinn Square Mile in Tai Kok Tsui next month. The Grand Mayfair I in Yuen Long, developed by Sino Land, K Wah International and China Overseas Land and Investment, will sell 388 flats on Friday.
Sun Hung Kai Properties’ Silicon Hill development in Pak Shek Kok and Prince Central in Ho Man Tin may be on sale in May, it said last week.
The impending launches may help the developers catch buyers seeking to pre-empt higher financing costs. The Federal Reserve is seen tightening its policy with rapid increases in interest rates to fight inflation at four-decade high. The Hong Kong Monetary Authority can be expected to raise its base rate in lockstep under the city’s linked exchange rate system to maintain the currency peg.
With developers taking new orders from buyers every day this week, the offers in April would be a big jump from just 162 units sold in March and 474 in February, according to government data. There were 1,073 units logged in January.
The current property market sentiment has noticeably improved, said Wheelock’s Wong, especially against March when infection cases were running in tens of thousands and domestic banks were forced to shut about a quarter of their branches.
He expects home prices to rise 3 per cent in the second quarter, recouping the decline in the preceding quarter. Easier mortgage financing measures, as announced by Financial Secretary Paul Chan Mo-po in the Budget in February, will support home demand.
“The local property market is likely to recover in the second quarter of this year, and will rebound strongly in the third and fourth quarter,” said Victor Lui Ting, deputy managing director at Sun Hung Kai Properties. Prices are expected to rise 5 to 10 per cent through the year, he added.
