Hong Kong property sales hit 10-month high in March, agents say momentum to continue this month
- ‘Market sentiment improved rapidly and transaction volumes increased’ last month after Hong Kong scrapped its property cooling measures in February: Centaline executive
- Centaline, Ricacorp forecast that sales could breach 9,000 deals mark in April
Sales of new and second-hand homes, parking spots, shops, offices and industrial units jumped by more than half to 5,013 deals last month from 3,189 transactions in February, the highest tally since the 5,284 property deals recorded in May, according to Land Registry data. From a year ago, however, the number of deals was still down by about 42 per cent.
In terms of value, the property sales amounted to HK$37.37 billion (US$4.77 billion), a 65.5 per cent increase from the HK$22.58 billion worth of deals recorded in February, but 45.7 per cent lower than a year ago, according to Land Registry data. The sales last month were the most since the HK$39.7 billion worth of deals recorded in June last year.
The government figures align with forecasts made by Midland Realty and Centaline Property Agency, two of Hong Kong’s largest real estate agencies, which said on Tuesday that the total number of transactions last month could have breached the 5,000 deals mark.
“After the government withdrew the property curbs, the property market sentiment improved rapidly and transaction volumes increased,” said Roen Yeung, a senior associate director in Centaline’s research department.
Among the measures scrapped by Financial Secretary Paul Chan Mo-po in his budget speech on February 28 were the Buyer’s Stamp Duty that targeted non-permanent residents and a New Residential Stamp Duty for second-time purchasers. Homeowners were also no longer required to pay a Special Stamp Duty if they sold their homes within two years. The decade-old measures were scrapped to boost a struggling property market.
CK Asset releases third price list for Blue Coast, sets stage for weekend sales
Mortgage financing was also eased. The Hong Kong Monetary Authority currently allows homes valued at less than HK$30 million to be eligible for 70 per cent mortgage financing, compared with the previous cap of 60 per cent for flats valued between HK$15 million and HK$30 million.
Sales of new and secondary residential units rose by about 67 per cent to 3,971 units in March from February, and hit the highest level since the 4,003 residential units sold in May last year, the Land Registry data shows. The residential sales last month amounted to HK$30.06 billion, rising by 67 per cent from February and hitting the highest level since June last year, when residential sales hit HK$33.6 billion.
This improved performance is likely to continue, with property sales forecast to reach 9,300 units in April, a 33-month high, according to Centaline.
Hong Kong’s Urban Renewal Authority to relax tender rules, borrow cash
Ricacorp Properties, another property agency, has forecast that 9,160 property transactions will be recorded in April.
“With developers actively launching new projects and late-stage projects throughout March, the registration of property transactions will have been fully reflected starting mid-March, so we expect more sales in April,” said Derek Chan, Ricacorp’s head of research.
Hong Kong home prices worsen in February to lowest level since September 2016
However, given that interest rates remain at more than a two-decade high, property consultancy JLL still believes that a short-term rebound in property prices is unlikely.
“I am pretty sure the property transactions this year will be impressive because developers are keen to dispose of their unsold stock and they’re offering attractive deals, but this means that in the secondary market, homeowners will have to sell at an even bigger discount and not many are willing to do that,” said Cathie Chung, senior director of research at JLL in Hong Kong.
Historical analysis suggests that home price stabilisation will require monthly secondary residential transaction volumes to stand firmly above 3,500 units, JLL said.
