Hong Kong homeowners slashing prices after US rate hike

Home sales in the secondary market remained sluggish over the first weekend after the US interest rate rise, forcing owners to knock down prices by up to HK$1 million to speed up sales, according to agents.

Hong Kong Property Services (Agency) said three transactions were registered in 10 major housing estates it monitored at the weekend, compared with two the previous week.

A 282 square feet unit in Tai Wai’s Golden Lion Garde changed hands for HK$2.73 million, or HK$9,681 per sq ft, the lowest transaction price this year, said Kingswood (Cosco) Property Agency. Similar units were sold for HK$3.78 million in June.

In North Point, a 1,105 sq ft unit at Braemar Hill Mansions was sold for HK$19 million after the owner cut asking prices from HK$20.05 million to HK$19 million.

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But even though more owners are willing to cut prices by five to 10 per cent, buyers are still not biting, said Jeffrey Ng, executive director of Hong Kong Property Services (Agency).

“What we have seen is that most potential buyers want to make use of the negative news to ask for a bargain,” he said.

The market has been in a holding pattern since the US raised interest rates and would become even quieter this week as many people are travelling abroad during the holiday season, he said.

“Most buyers prefer to defer their purchase decisions,” said Ng.

Chris Wong, executive director at Century 21 Sunshine Property, said owners in general are likely to offer bigger discounts following the rate hike.

The owner of a 446 sq ft unit at Healthy Gardens in North Point cut the asking price to HK$6 million from HK$6.6 million after the rate rise, he said.

Wong said the number of units put on sale have risen 15 per cent since the rate hike to 1,197 among 11 major housing estates in North Point.

“One transaction was concluded before the US rate hike but not a single deal closed after the news. No one wants to buy now as buyers in general believe home prices will fall,” he said.

The number of flat viewing appointments also saw a week-on-week drop of 20 per cent at the weekend, he said.

“The market is even worse than in 2003 when Hong Kong was gripped by the outbreak of the severe acute respiratory syndrome (SARS) epidemic. So far this month, only four deals closed in the 11 major housing estates we monitored , compared 8 to 10 deals in 2003,” he said.