Violence in Hong Kong’s Yuen Long casts long shadow over property projects in New Territories
- New home sales expected to drop 20 per cent this month, Centaline Property Agency says
- Developers such as New World and Chinachem, however, say violence unlikely to affect sales
Mob violence in areas such as Yuen Long will affect demand for new projects in the northern New Territories of Hong Kong, with sales expected to drop 20 per cent this month, Centaline Property Agency said on Tuesday.
The number of new homes sold will decline to about 1,200, the agency said. “If social events, such as protests, are happening, their impact is unavoidable,” said Perry Fong, Centaline’s senior sales director. “There is a psychological impact in the short term.”
Ryan Ku, client manager at Many Wells Property Agent, said the protests and any violence would dampen buying interest, with fewer potential buyers visiting show flats.
The projects in Yuen Long that could be affected by Sunday night’s violence include New World Development’s 313-unit Atrium House, Far East Consortium’s 24-unit Manor Parc, as well as Chinachem Group’s 720-unit Sol City.
New World, however, said its projects were unlikely to be greatly affected, with sales continuing as usual, because its sales office was in Tsuen Wan. Far East, meanwhile, said its sales would not be affected by “isolated incidents”. It added that land supply in Hong Kong was tight, and this was a fundamental reason why home prices were high.
Donald Choi, the Chinachem chief executive, said he remained confident about the market despite the violence in Yuen Long. “So far, we do not see a big impact,” Choi said. “The market has ups and downs, but Hong Kong has good prospects.”
Meanwhile, the sales office in nearby Tuen Mun of the 356-unit TPlus project, where micro flats are being developed by Jiayuan International and the Stan Group, remained shut on Monday and only opened on Tuesday. Stan Group declined to comment on whether it would delay putting its remaining units on the market, while Jiayuan said its project was not affected by the violence.
Other projects in Tuen Mun include Sun Hung Kai Properties’ Mount Regency Phase II and a China Evergrande project on Kwun Chui Road.
Sun Hung Kai Properties said the Mount Regency Phase II project will proceed as scheduled. China Evergrande, on the other hand, said the launch of its Tuen Mun project depended on the pace of overall sales. “Currently, the project is still in the planning phase,” it said.
Major property agencies such as Centaline, Midland Realty and Many Wells Property Agent, closed their branches in Yuen Long, Tuen Mun, Tin Shui Wai and even Tsuen Wan on Monday after the mob violence, allowing their staff to go home early, and even relocated some to the sales venues of new projects. The affected branches were open on Tuesday.
Mob violence on Sunday night, in which anti-extradition law protesters and commuters were targeted by alleged triad gang members at the Yuen Long MTR station, as well as a sixth weekend of protests against the controversial law are expected to affect property sales in the special administrative region.
“After the events of the weekend, secondary market sentiment in Tin Shui Wai has been largely quiet. Some buyers have postponed flat viewings,” said Victor Ng, regional sales manager at Centaline.
Elsewhere, Hong Kong property stocks slumped on Monday as well as on Tuesday. Shares in Sun Hung Kai Properties, whose Yoho Mall and New Town Plaza have been affected by the violence, declined by 2.9 per cent over both days. Link Reit, which has a number of shopping centres in the affected areas, declined by 1.3 per cent across both days.
Hong Kong home prices might drop between 3 per cent and 5 per cent in the second half of 2019 if mob violence persists for more than three months, dragging down the city’s economy with them, said Billy Mak, associate professor of finance and decision sciences at Baptist University.
“If it makes a lot of people want to emigrate and cash in by offloading properties”, home prices will drop, said Mak, adding that the property market was likely to remain downbeat in the coming months.