Hong Kong government-funded home sells for record HK$9 million in Shau Kei Wan

A 650 sq ft apartment in Hong Kong’s Shau Kei Wan neighbourhood has sold for HK$9 million (US$1.15 million), according to the city’s Housing Authority, making it the city’s most expensive second-hand government-funded residential unit.

The three-bedroom apartment in Tung Yuk Court broke a record set by a similar sized unit in the same estate that sold for HK$8.93 million in May last year.

“Nothing can dampen Hongkongers’ demand for a home, unless supplies are boosted by a large amount,” said Derek Chan, head of research at Ricacorp Properties. “We will see government-funded homes being sought after by home seekers who cannot afford private homes, which are astonishingly expensive and small.”

Tung Yuk Court is a residential estate part of the city’s Home Ownership Scheme. Anyone eligible for applying for a public rental home can buy a property part of the scheme without having to pay a premium to the Housing Authority. Homes part of the scheme sold in the open market attract a premium of 43 per cent payable to the government.

A record 2,860 second-hand Home Ownership Scheme homes have been sold in the first six months this year, for HK$14.7 billion, Centaline Property said on Tuesday.

The demand for homes – whether they are tiny, old or even haunted – is booming in Hong Kong despite economic uncertainty in the special administrative region and a slowing economy in mainland China.

Of the 344 tiny apartments on sale in Tuen Mun in the city’s New Territories on Sunday, 339 apartments are snapped up for more than HK$1 billion on the same day. Less than a month ago, a 598 sq ft flat in Fung Tak Estate in Kowloon sold for HK$5.26 million, making it the most expensive public rental housing unit in Hong Kong.

More than half of the respondents polled by Squarefoot, an online property portal in Hong Kong, recently said they would consider living in a home that had a “tragic” past, if the price was right.

Meanwhile, data from the city’s Rating and Valuation Department shows an index of second-hand homes rose by 10.4 per cent in the first five months this year to a historic high of 396.8. Ricarcorp said it expected another 3 per cent increase in the second half of 2019.

To be eligible for units part of Hong Kong’s Home Ownership Scheme, a two-member family must have a maximum gross monthly income of HK$58,000 and assets of HK$2.01 million or below, while a single-person household needs to earn half that amount.

To be eligible for public rental apartments, a two-member family must have a maximum gross monthly income of HK$18,690 and assets of up to HK$348,000, while individual applicants must be earning a maximum of HK$11,830.

Two Hong Kong banks cut valuation of used homes in several estates

Applicants can at first apply only to rent these units, which can later on be bought from the government. According to Centaline, 509 public rental homes were sold in the first six months this year for HK$1.4 billion, a 19-year high.