Homebuyers shrug aside Hong Kong’s coronavirus fears, snapping up every Mid-Levels flat offered by Henderson Land for sale

Hong Kong’s homebuyers shrugged aside a coronavirus outbreak that has kept office workers, shoppers and visitors to stay indoors, snapping up a limited release of new flats over the weekend.

Henderson Land Development, the city’s third-largest property developer, sold all 15 flats at its The Richmond project in the swanky neighbourhood of Mid-Levels on Hong Kong Island. The single block, due for completion in November 2021, comprises 90 apartments of between 206 and 300 square feet (27.9 square metres), priced between HK$6.3 million (US$811,000) and HK$9.7 million.

The successful sale, following a January 21 sell-out of 30 flats at the project, raises the revenue tally from The Richmond to HK$360 million, Henderson said.

“Sixty per cent of buyers came from Hong Kong Island, Kowloon and New Territories, each making up 20 per cent” of the customers, said Henderson’s general manager Mark Hahn, adding that the satisfactory” sales response gives the developer the confidence to offer a third-round sale soon.

The brisk sales, even amid a coronavirus outbreak that has stopped property exhibitions and an ongoing political crisis, shows how the Hong Kong government’s easing of mortgage rules is effectively attracting more first-time buyers into the market. Some analysts are forecasting property prices to rise 10 per cent this year.

In October, Chief Executive Carrie Lam Cheng Yuet-ngor announced a measure that allowed government-backed Hong Kong Mortgage Corporation to relax the ceiling on mortgage financing schemes for first-home buyers. Purchasers will be able to borrow up to 90 per cent of a property’s value to a maximum of HK$8 million from HK$4 million previously.

“The Richmond continues to be popular among buyers, especially investors,” because the combination of the location with the price point makes the project attractive, said Sammy Po Siu-ming, chief executive of Midland Realty’s residential division. “Even with the coronavirus [outbreak] … buyers are still interested in entering the market and looking for high-quality units.”

In the case of The Richmond, buyers only need to put down 10 per cent of the sale price, or at least HK$630,000, if they choose staggered payments and will only need to start servicing their mortgages when they take possession of their property.

The price range of the project is relative cheap for a premium address in Hong Kong, with easy access to the Central business district making the neighbourhood the ideal location for expatriates and professionals.

Apartments at The Richmond are likely to be leased for between HK$80 and HK$90 per square foot per month on average, at least 23 per cent higher than the prevailing market price in Mid-Level West, according to data by property consultant Knight Frank.

“The project has great rental potential [for expatriate and professionals], so it is favoured by long-term investors,” he said. “About half of the buyers are investors. New flats in Hong Kong Island is always popular as new supply is limited.”