Hong Kong homebuyers turned out in droves on the Dragon Boat Festival holiday on Friday and snapped all homes that Sun Hung Kai Properties (SHKP) offered in New Territories, despite an expected hike in interest rates and the city’s weakened economy. All 170 homes put on the market at Silicon Hill in Pak Shek Kok in the city’s northeastern Tai Po district were sold as of 5pm, agents said. Another 18 homes had been offered through tender and the results of these bids have not been made public yet. The project comprises three phases and 1,871 homes, and its first round was priced at an average of HK$17,498 (US$2,230) per square foot, 6 per cent lower than the average price of lived-in homes at St Martin, which is a 10-minute walk away from Silicon Hill and was launched by SHKP four years ago. “Many young buyers, aged around 30, bought their first homes, as the total price was not that high. They were also betting on the future of Pak Shek Kok, where the launch of a new MTR station has been confirmed,” said Sammy Po, CEO of Midland Realty’s residential division for Hong Kong and Macau. Hong Kong’s property market regains mojo as deals hit 10-month high in May The city’s home market has been robust in recent months, defying an expected interest rate hike and still weak economic growth. The cost of buying a house locally is rising, with the benchmark one-month Hong Kong Interbank Offered Rate (Hibor) expected to rise to 1.5 per cent in the third quarter of this year. It will follow the same upwards trajectory as the higher interest rates set by the US Federal Reserve and the Hong Kong Monetary Authority. At the same time, the local jobless rate in the three months ending April rose to 5.4 per cent, its highest level in 12 months, and about 206,100 people were out of work in this period. Henderson Land backs John Lee’s housing and land supply pledge At the same time, a price index of lived-in homes compiled by the Hong Kong government edged up 0.4 per cent to 390.8 in April and was about 1.5 per cent shy of the 396.9 recorded in May 2019. Analysts said they expected the increase in May to amount to 1.5 per cent, which meant the index could break this record. And if the index rose by about 1 per cent in June, it could climb to the unprecedented 400-point mark. The cheapest unit on offer at Silicon Hill was a 291 sq ft studio priced at HK$4.96 million. About 3,200 bids were received for the first batch, which means about 18 people were vying for every unit on sale. Hong Kong homebuyers hesitant amid rising mortgage rates “It is mainly due to the easing of the Covid-19 outbreak. Homebuyers expect things will bottom out in the second half,” said Derek Chan, head of research at Ricacorp Properties. New home sales were expected to rise to 2,000 units this month, as new developments gradually enter the market, he added.