Developers speed up flat launches as mainlanders return to Hong Kong's housing market
Mainlanders return to city's housing market following slump due to increased stamp duties
Developers are speeding up new launches in Hong Kong, with more than 3,000 flats to hit the market over the coming months. The new releases will intensify a battle to lure home-seekers who have lost patience waiting for a market correction.
The expedited launch schedules also coincide with the gradual return of mainland buyers to the city's housing market after a sharp decline in their ranks in the wake of the heavy stamp duties imposed over the past two years.
However, some analysts warn that while developers continue to enjoy strong primary sales, transactions in the secondary market remain slow. Moreover, the luxury market is still weak, indicating that the broader market is yet to fully recover.
In the primary market, developers managed to sell about 170 units on Saturday. Sales were again led by Sun Hung Kai Properties' Wings IIIA in Tseung Kwan O, with a further 116 units sold.
Agents said the number of sales was fewer than the 200-plus units achieved the previous weekend as fewer projects were offered. But more units are coming into the pipeline.
Major launches to watch include Cheung Kong's 291-unit Mont Vert Phase II in Tai Po and its 1,648-unit Hemera in Tseung Kwan O. The first batch of 220 units at the 1,092-unit Double Cove III in Ma On Shan, owned by Henderson Land Development and New World Development, will be offered for sale shortly. Also on the way is China Overseas Land and Investment's 255-unit The Nova in Western district.
Developers are rushing to sell as long-term investors and mainland buyers become more active, encouraged by rising home prices over the past few months.
On Friday, the CCL home price index for the secondary market rose 0.52 per cent per cent week on week to 126.8, slightly below the market peak of 126.94 logged for the week to August 31.
"Mainland buyers now primarily focus on primary launches as developers will pay stamp duties for them," said Patrick Chow Moon-kit, head of research at Ricacorp Properties.
Mainland investors had retreated from the city - some with losses - after the government scaled up a series of cooling measures since 2012. They included an extra 15 per cent tax on non-local buyers and double stamp duty.
According to Centaline Property Agency, luxury flats in the primary market bought by mainlanders accounted for 26.3 per cent of purchases in this sector in the second quarter, up 2.8 percentage points from the previous quarter.
In the second quarter of 2013, shortly after the government announced the double stamp duty, this proportion fell to 18.3 per cent.
Centaline expects the share of mainland buyers could rise to 30 per cent in the third quarter - still a long way off the peak of 45.9 per cent in the first quarter of 2012.
Chow said the broader primary market had been supported by demand for small and medium-sized flats over the past few months.
He said buyers and investors had set their sights on the upcoming sale of two luxury projects - Swire Properties' Arezzo in Mid-Levels West and a project in Ho Man Tin owned by investment fund Phoenix Property Investors.
"The luxury end market is a good indicator of the market outlook, as this market segment is driven by high-net-worth individuals, who are more experienced home buyers-investors," Nicole Wong, regional head of property research at CLSA, said earlier this month.
Ricacorp reported 347 transactions at 50 selected housing estates in first 15 days of September, down 14 per cent month on month and the lowest recorded in seven months.
An earlier version of this story misidentified Nicole Wong as a Credit Suisse analyst. She is the regional head of property research at CLSA.