Hong Kong’s major property developers are rushing to put more than 27,000 new homes on the market this year, seizing on an uptick in buying sentiment and transaction volume after the relaxation of anti-pandemic measures and the reopening of the border with mainland China. At least 14 developers, including Sun Hung Kai Properties (SHKP), Henderson Land Development, New World Development, Sino Land and K Wah International, plan to launch some 36 developments with around 27,350 homes this year, according to the Post’s tracking of sales plans revealed in late January and early February. The pressure of high interest rates on the property market will gradually diminish, said Victor Lui Ting, deputy managing director at SHKP, Hong Kong’s biggest developer by market value. “In the past month, home prices in the local second-hand market have picked up, and the turnover of first-hand transactions is even more active than before,” he said, adding that home prices are expected to see a mild increase of 5 to 10 per cent this year. Six major lenders, including HSBC, Hang Seng Bank, Citibank and Standard Chartered, said on February 2 that they would keep their prime lending rates unchanged after Hong Kong’s monetary authority raised the city’s base rate by 25 basis points in lockstep with an increase by the US Federal Reserve. In addition, the Hong Kong interbank offered rate – the interest banks charge each other for borrowing money – has dropped by half in the past two months, Lui added. In January, new home sales jumped 54.9 per cent over December to 350, although this fell short of November’s 371, according to Centaline Property Agency. Hong Kong property deals hit three-month high in January, may rise this month too SHKP expects to launch phase 2B of Novo Land in Tuen Mun, with 729 flats, in February and University Hill in Tai Po, with 746 flats, around Easter. K Wah International appears to have the biggest sales plan, as it is involved in five projects with other developers, with 8,072 homes set to hit the market. The total of 27,350 includes developments in the Kai Tak area, where a government plan to erect temporary public housing, as well as its decision to reduce office space in the area and scrap a planned monorail, have adversely affected public perception of the area’s prospects . Hong Kong’s Kai Tak housing plan grounds high-flying expectations New-home sales fell 41.3 per cent year on year in 2022 to a nine-year low of 10,261, according to Centaline, which expects a recovery to a normal level of around 18,000 this year. New homes had the worst performance among all property categories in 2022 according to Ricacorp, as overall property transactions nosedived 38 per cent to a 32-year-low of 59,619, according to Centaline. The difficult market prompted the total number of property agent licences to sink to a 23-month low of 40,807 in January, according to data from the Estate Agents Authority. Seller takes US$16.6 million loss on luxury Hong Kong home at The Peak SHKP sold 3,053 new homes last year, the most among all developers, bringing in HK$24.76 billion (US$3.16 billion), according to Centaline. Sino Land was next with 2,248 homes worth HK$23.03 billion. About two-thirds, or 14,104, of the private homes completed in 2022 have been sold, according to Centaline – a sales ratio lower than the usual range of 70 to 80 per cent in previous years. To be sure, the market is not completely rosy. Notably, CK Asset cut prices last week for 10 remaining flats at Seaside Sonata in Cheung Sha Wan by 10 to 16 per cent, or as much as HK$2.4 million “because of market correction”. Hong Kong’s negative equity soars to 12,164 cases as home prices fall The developer wanted to finish the sales effort and believes market recovery will take time despite the border reopening, it said, adding it wanted to use a reasonable price to proactively drive sales amid keen competition. Meanwhile, the luxury segment could suffer a price decline of 5 to 10 per cent in 2023, given looming recession risks in the United States and European Union economies, elevated interest rates, and “punitive” measures on residential-property transactions, JLL warned in a report on Monday. “For a long time, demand for luxury units by non-locals has boosted and extended support to luxury home prices,” said Nelson Wong, executive director of research at JLL in Hong Kong. “However, the economic headwinds in mainland China and continued difficulties and hindrances in the expatriation of funds to offshore markets could result in less buying intentions and more selling pressure in the luxury sales market.” For example, in the fourth quarter of 2022, homes at Mount Nicholson on The Peak and 39 Conduit Road in Mid-Levels were sold by mainland Chinese for HK$500 million and HK$378 million, resulting in estimated losses of HK$134 million and HK$39 million, respectively, JLL said, citing media reports.