Hongkongers sell lived-in Home Ownership Scheme flats at losses, as rising interest rates weigh on sentiment

Even estates that have seen the priciest HOS flats in recent years have reported losses and prices well below market levels for lived-in homes in August

Wider losses possible, as the home price outlook remains bearish for the coming months, Ricacorp executive says

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Charming Garden in Mong Kok. Photo: Sam Tsang

Published: 8:30am, 31 Aug 2022

Buyers who paid high prices for their government-subsidised flats under the Home Ownership Scheme (HOS), have resold at losses recently as rising interest rates hurt buying sentiment, according to transaction records.

Even estates that have seen the priciest HOS flats in recent years, such as Charming Garden in western Mong Kok and Fu Keung Court in Yau Yat Chuen, have reported losses and prices well below market levels for lived-in homes in August.

In Charming Garden in western Mong Kok, a 484 sq ft flat sold for HK$4.64 million before premium, according to agents. It was between 18 and 24 per cent cheaper compared to similar flats in the estate. Charming Garden was the first estate to see an HOS flat surpass HK$10 million in price in July 2018.

A 401 sq ft flat at Fu Hong House in Fu Keung Court changed hands for HK$4.95 million at a loss of HK$350,000, or 6.6 per cent, this month, according to Full Mark Property Agency. The flat was bought for HK$5.3 million in early 2018. Hong Kong’s most expensive HOS flat, a 645 sq ft home, was sold in this estate for HK$11 million in May last year.

“For [lived-in] HOS homes that change hands under the current market conditions, if the owner bought at a high level from 2017 to 2019 and now wants to resell, there is a great chance of loss,” said Derek Chan, head of research at Ricacorp Properties. “Wider losses are also possible, as the home price [outlook] remains bearish in the coming months.”