Hong Kong developers set to delay launch of new flats as sector counts on easing of property cooling measures: agents

Developers may hold off on launching sales at new projects until the government eases decade-old curbs, which is now seen as highly likely
Buyers also taking a wait-and-see approach ahead of Hong Kong leader’s annual policy address on October 25, agents say

Hong Kong property

Salina Li

Published: 7:00am, 29 Sep 2023

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Hong Kong property developers are expected to put their latest projects on hold as the property sector widely anticipates that long-standing cooling measures that add to the cost of buying a home will be eased soon, according to property agents.

“Some residential projects may stand by and launch as soon as the government eases the cooling measures,” said Sammy Po Siu-ming, CEO of Midland Realty’s residential division for Hong Kong and Macau.

Projects like KT Marina in Kai Tak, a new phase of Sun Hung Kai Properties’ Novo Land in Tuen Mun, and Yoho West in Tin Shui Wai are prime candidates for delays in launch plans, Po said.

The anticipation comes after the government gave its strongest hint yet that it could soon ease the cooling measures, with Financial Secretary Paul Chan Mo-po saying on Wednesday that the conditions that prompted authorities to impose them more than a decade ago no longer prevailed.

The Novo Land development in Tuen Mun, built by Sun Hung Kai Properties, is one new project that could delay its sales launch, according to a property agency CEO. Photo: Xiaomei Chen

“The market has been quiet recently, partly because buyers also remain on a wait-and-see attitude until the [government’s annual] policy address on October 25,” Po said, adding that transactions will continue to hover at a low level until then.

Earlier in July, the Hong Kong Monetary Authority (HKMA) and Hong Kong Mortgage Corporation relaxed loan rules covering some homes to make them more accessible for first-time buyers and easier for owners to trade.

It was the first easing of curbs since the HKMA launched measures in 2009 to reduce potential risks to financial stability arising from an overheated property market.

Despite that move, Hong Kong’s property market has cooled as multiple headwinds, including the economic outlook, elevated interest rates and a glut of new flats, continue to weigh on buyer sentiment.

Lived-in home prices in August fell 1.4 per cent month on month, the fourth straight month of decline, according to an index compiled by the Rating and Valuation Department.

Analysts widely expect home prices to drop by about 5 per cent by the end of this year, after seven major lenders, including the three note-issuing banks – HSBC, Standard Chartered Bank and Bank of China (Hong Kong) – said they would raise their mortgage rates last week.

KT Marina, a new project in Kai Tak, jointly developed by K. Wah International, Wheelock Properties and China Overseas, is expected to launch sales in October.

“We have not made a decision on when the sale will take place, but will closely monitor the market condition,” Tony Wan, director of sales and marketing for Hong Kong Properties at K. Wah International, said on Thursday when asked whether the project will launch after the policy address.

The developer said KT Marina, with a total of 2,138 units, will launch its first phase with 1,017 units. The project has received presale consent and was originally slated to launch earlier this year.

Wan said he hopes the government can start by easing the buyer’s stamp duty, as the 15 per cent tax on non-permanent residents buying their first property in the city affects mainland and foreign investors.

Easing it would attract more foreign professionals to “settle down in Hong Kong”, he said.

He also suggested lowering the ad valorem (according to value) rate to encourage Hong Kong people to invest more in local properties, as the residential rental market has recently shown good performance, making it attractive to investors.