Hong Kong’s millennials join red-hot property party, snap up 50pc of units launched over weekend

Hong Kong’s millennials, fearing that they will soon be unable to afford property in one of the world’s most expensive cities, have joined the real estate rush.

Buyers snapped up about 250 units in four projects with prices ranging from HK$19,975 to HK$28,235 (US$2,545 to US$3,600) per square feet during the past three days, proof that there is no sign of a slow down in the city where house prices have been rising for 24 consecutive months, according to real estate company Colliers International Hong Kong.

Sun Hung Kai Properties, Hong Kong’s second-largest developer by market capitalisation, saw about 100 units at its project Wings At Sea II, at Lohas Park, Tseung Kwan O, snapped up by buyers on Sunday, according to Sammy Po Siu-ming, chief executive of Midland Realty’s residential division. 

He said that around half of the buyers were millennials, adding that some of them will need help from their parents either to make part of the down payment or to partially pay off their mortgages as they make their way up the property ladder.

Despite a string of cooling measures by the government, Hong Kong was judged the world’s least affordable housing market by US planning consultancy Demographia for the eighth successive year in January.

According to Demographia, the median property price in Hong Kong now stands at around 19.4 times the median annual household income, compared to around 8.5 times in London, a city that is also listed among some of the most unaffordable places in the world.

A flat smaller than 430 sq ft on Hong Kong Island, the city’s central area, costs an average of HK$16,103 per sq ft while the price tag for one in Kowloon is about HK$13,763 per sq ft, according to the Rating and Valuation Department.

Despite such elevated prices, the city’s millennials – born between 1981 to 1996 – are joining the property rush to secure their future. 

This group accounted for 32.3 per cent of total new mortgages taken in the first quarter of 2017, up from 19.1 per cent in the same period of 2013, according to figures from the credit bureau TransUnion.

Flats released at other projects also witnessed similar levels of excitement from buyers during the weekend.

Seventy-eight units at SHKP’s Mount Regency project in Tuen Mun were sold out within three hours on Saturday, bringing nearly HK$400 million for the developer.

Wheelock Properties sold 50 units at its Grand Oasis project in Kai Tak within one and a half hours of its launch on Friday, raising around HK$700 million. 

Mount Pavilia by New World Development, which is located in Clear Water Bay, one of the city’s most sought after districts, sold 17 units on Saturday, with a 2,619 sq ft flat fetching HK$74 million or HK$28,235 per sq ft.