Hong Kong’s housing market may not follow weakness in Singapore, says Wing Tai Properties
Singapore saw disappointing sales and falling prices of private homes due to government-introduced cooling measures, yet developer Wing Tai Properties believes Hong Kong’s housing market may not necessarily follow the path of the Southeast Asian country.
Singapore implemented higher stamp duties, tougher mortgage conditions and other property cooling measures since 2009 which depressed sales in both the primary and secondary markets, while prices fell for the eighth straight quarter to 4-1/2-year lows and are now down 8 per cent from their last peak in the third quarter of 2013.
Although Hong Kong has introduced similar measures, Edmund Cheng , deputy chairman of the Singaporean developer, said that the city’s market may not follow Singapore’s.
“The two cities are so similar, but even then - every place is different,” said Cheng, adding that Singapore’s public housing situation creates a different supply and demand dynamic in homes compared to Hong Kong.
“Even if they want to go (for) what Singapore has, it will not be totally replicated.”
Hong Kong ‘s property sales last month slumped to a 19-month low , with sales down 43.63 per cent year on year, compared with September’s drop of 31.6 per cent. Home prices have been softening but are still up 6.6 per cent from the beginning of the year.
Cheng also believes that the slowdown in Singapore market will not affect the luxury sector.
The developer is releasing six new duplexes in its Le Nouvel Ardmore project, a luxury residential development located in a prime district at Ardmore Road, to Hong Kong buyers at the end of this week. The announcement comes as the sale of private homes by developers fell 30 per cent in October from last year, as a result of cooling measures by the government.
“For the mass market - yes I believe there is a drop of up to 30 per cent. But even within the mass market, it depends on different areas,” said Cheng. “When you talk about (the luxury sector) it’s a totally different market. In fact I would say that as the economy continues to grow and the government becomes stronger, the value will continue to appreciate.”
Le Nouvel Ardmore contains 43 large apartments with 34 suites at 3,789 to 4,133 square feet, eight duplexes at 4,058 to 5,360 square feet and one penthouse at 13,875 square feet.
The penthouse was sold to Chinese billionaire Sun Tongyu, co-founder of e-commerce site Alibaba and a Singapore permanent resident, for a record-breaking S$51 million (HK$291 million) this summer.
The six duplexes will be released at a sales exhibition on November 28 and 29, and will have an entry selling price of about S$20 million, or about S$5,000 per square feet. The total value of the duplexes amount to S$142 million.
“Many Hongkongers are starting to have an interest in Singapore,” Cheng said, adding that he currently does not have plans to open up the properties to the mainland.
Hongkongers and Chinese nationals bought 39 and 675 properties respectively from January to September this year, according to latest figures from ERA, one of Singapore’s largest real estate agencies. Last year, the number of properties bought by the Chinese amounted to 995, a sharp decline from the peak in 2011 which saw the sale of 2,807 properties.