Hong Kong secondary flat owners cut prices to spur sales

Price cuts have emerged as the new tactic in Hong Kong’s secondary housing market as nervous flat owners want to dispose of their properties given the current weakening market sentiment.

Agents said some owners have slashed their asking prices by 7-9 per cent to speed up sales as sentiment had been battered by news of deposit forfeitures and volatility in the stock market.

A price cut of as much as 9-10 per cent has been seldom seen in the city as the housing market’s up-cycle is now into its 12th year, agents said.

For example, a buyer sold its unit at Tanner Garden in North Point for HK$10 million after reducing the asking price by HK$1 million, while a unit in Avon Park in Fanling was sold for HK$4.03 million, six per cent below its asking price.

Thomas Chan, a sales manager at property agent Centaline Property Agency, said the selling price of Avon Park was at the low range of the market price.

“Some flat owners are cautious about the market outlook looking at the market sentiment,” said Chan.

An increasing number of analysts are cautious in projecting the price movement of homes here.

JP Morgan earlier expected home prices in Hong Kong could fall 5-10 per cent every year, starting in 2016.

Another investment bank Barclays is also negative on the outlook of the city’s property market, citing a decline in the absolute numbers of the young generation as a reason.

In its report released on Wednesday, Barclays said there is a significant population drop off below the 30-34 year-old range.

For instance, counting both male and female, there are 584,100 persons in the 30-34 year old age range. This drops to 513,400 persons in the 25-29 year old age range and then to 432,300 persons in the 20-24 year old age range, the report shows.

“As the earlier Census data highlighted, since most Hong Kong people’s transition to home owners happens in the ages of 25-34, unless we were to see an influx of university students or returnees, the number of potential first time home buyers looks set to be lower than the last 5-10 years,” Barclays said.