Few flats available for HK$2m or less, except in Tuen Mun and Yuen Long

Price rises this year mean the only flats available for HK$2 million or less are in old buildings in Tuen Mun and Yuen Long

PUBLISHED : Wednesday, 10 October, 2012, 12:00am
UPDATED : Wednesday, 10 October, 2012, 2:21am

With the prices of Hong Kong homes at all-time highs, people hoping to enter the market with budgets of HK$2 million or less are finding the search increasingly difficult.

Options available at this price have been narrowed down to small flats in Tuen Mun and Yuen Long, mostly in buildings that are more than 30 years old and have no lifts.

"Tuen Mun used to be known as a haven for first-time home buyers as flat prices in the area lagged behind increases in the rest of Hong Kong," said Pun Ka-yan, business director of Many Wells Property, an agency that focuses on the Tuen Mun residential market.

"But the number of flats priced at HK$2 million or below is falling sharply."

According to the firm's research, there are at present 230 flats on sale in the area at HK$2 million or less; down from 1,284 in January this year.

The flats include Home Ownership Scheme units and public housing flats on which owners have settled land premiums and that are now available for sale.

Compared with a 15.7 per cent rise in average home prices in Hong Kong so far this year, the firm's study found that prices in Tuen Mun have soared by more than 41 per cent, from HK$3,307 per square foot to HK$4,676 per sq ft as at October 7.

A 359 sq ft one-bedroom flat in the Lee Bo Building was now on offer at HK$1.8 million, said Pun, and the drawcard supporting the price in the 30-year-old building was its location - just 15 minutes by bus to the nearby On Ting station on the MTR Light Rail system.

Home seekers who want a bigger flat at this price level would have to hunt among Home Ownership Scheme flats on which owners had paid the required land premiums and were therefore now free to sell, she said, citing the case of a 496 sq ft flat in 21-year-old Siu Hin Court that is on offer at HK$1.8 million.

Bill Lau, a sales executive at property agent Yearsfull, which focuses on the Yuen Long home market, said most flats priced at about HK$2 million would be sold very quickly. "At the moment there are about 10 flats for sale in this price range, compared with earlier this year when there were lots of flats for sale priced at about HK$1.5 million," he said.

Flats in the area were popular among investors who could rent out a one-bedroom flat for HK$6,000 a month, Lau said.

Patrick Chow, head of research at Ricacorp Properties, said only a handful of flats priced for sale at HK$2 million or below were available, mainly in older buildings in districts such as Shau Kei Wan, To Kwa Wan and Sham Shui Po. "The buildings are likely to be 40 to 50 years old," he said.

Data from Ricacorp Properties show that 19,643 flats priced at HK$2 million or below were sold last year, at a total value of HK$15.35 billion, which accounted for 26 per cent of all home sales in the year.

By comparison 51,961 flats priced at HK$2 million or below changed hands in 2010, and the total value of HK$76.90 billion accounted for 42 per cent of all home sales.