Analysis | Hong Kong agents feed illusion of demand to bolster property sales
With 5,000 new properties changing hands every month, that leaves about seven real estate agents chasing after every single transaction in Hong Kong. To survive the competition, the game plan is to create the illusion of demand to persuade fence-sitting buyers to close the deal
Last weekend, three apartment projects opened for sale across Hong Kong, with a total of 1,000 units on offer.
The sale, the first since the Hong Kong Monetary Authority raised the key lending rate, garnered huge interest, with up to 23 buyers on average expressing interest for every unit available.
As a result of the enthusiastic interest received, Sun Hung Kai Properties’ Cullinan West apartments at Nam Cheong MTR Station and Wheelock Properties’ Monterey project at Tseung Kwan O sold out.
Not quite. The number of registrations of interest creates the illusion of demand, and by so doing draws fence-sitting property buyers into the circle.
Here is how it works. SHKP requires customers to deposit HK$200,000 to reserve the right to buy a Cullinan West unit. Wheelock requires HK$100,000 for Monterey, as does Cheung Kong Property Holdings for its Seanorama apartments at Ma On Shan. The reservations go into a ballot where the selected buyer gets the chance to pick their preferred units and conclude their purchases.