Hong Kong property sales rebounded to a three-month high in April as owners became more willing to offer big discounts, or even sell at a loss to get deals done, a trend that could drag home prices down further. The value of transactions rose by about a fifth to HK$41.9 billion (US$534 million) as the number of deals increased by more than a quarter to 4,847 from March, according to Centaline Property Agency. The transactions in Centaline’s figures included homes, shops, industrial units and car parking spaces. Many homeowners have been willing to drop their prices by as much as 12 per cent, according to analysts. Their reasons for wanting a quick sale varied. Some – part of an unprecedented exodus of Hongkongers and expatriates – needed to leave Hong Kong quickly when the approval of their overseas immigration applications set the timer running. Others were keen to offload their tiny units as new government size regulations are likely to ensure a torrent of larger but still affordable homes come to market, undermining the value of so-called nano flats. “While there is still robust demand keeping home prices stable during the fifth wave of Covid-19, we can see that there are some house owners who are more inclined to offer discounts to close the deals, including those that have just got approval for their immigration applications, and owners of microflats or studio flats ,” said Hannah Jeong, head of valuation and advisory services, Colliers Hong Kong “With the prolonged impact of Covid-19 and the political situation in Hong Kong, we have seen some homeowners, mainly parents, who have submitted applications for immigration [overseas] and wanted to sell their flats in exchange for cash flow as they move to another country.” Owners of nano flats – tiny apartments typically smaller than 200 square feet (18.6 square metres) – have been offering steep discounts as they upgrade to larger units. The government’s ban of flats under 280 square feet means better flats within their price range are coming to the market. Jeong said she knew of three owners of micro flats that sold them at a loss. Two of them bought 162 square-foot units in 2017 in Cheung Sha Wan for HK$3.7 million and HK$3.8 million, respectively. They sold them this year for HK$3.45 million and HK$3.58 million, losses of 5 per cent and 6.8 per cent. Another, who bought a 185 square-foot flat in Hung Hom in 2017 for HK$3.4 million, sold the property in March for HK$3 million, a loss of about 12 per cent. “We have seen up to 5 per cent discounts in some estates and they were significantly off the market average,” said Martin Wong, director of research and consultancy for Greater China at Knight Frank. What is the minimum size rule for Hong Kong flats and will it affect home prices? Property consultancy JLL downgraded its forecast for this year’s mass residential market prices. It now expects them to drop by about 5 per cent, having previously forecast a rise of 0 to 5 per cent. It cited dampened sentiment in the first quarter. “For micro and studio flats, we expect the pricing will continue to drop in the coming months due to the recent government announcement banning flats under 280 square feet. The increasing adoption of the work-from-home policy is making buyers choose bigger flats instead of smaller ones for a more spacious living environment,” Jeong said. “For those looking to emigrate, owners with homes in less ideal locations will face a bit more pressure but as the fifth wave’s impact is not as serious now, there is no need for owners to massively reduce prices to sell their flats.” Transactions may also have been boosted by the availability of bigger mortgage loans for first-time buyers. From February 23, the mortgages available on homes with a loan-to-value ratio of 80 per cent increased to a maximum of HK$12 million (US$1.54 million) from HK$10 million. First-time buyers who qualify a loan-to-value ratio of 90 per cent can borrow up to HK$10 million in mortgage financing, more than the previous maximum of HK$8 million.