Hong Kong home sales slow during National Day holiday after developers raise prices

Hong Kong home sales, currently dominated by new projects, slowed during the National Day holiday as buyers turned cautious after developers raised prices by as much as 10 per cent within a month, industry experts said.

In the primary residential market, about half of the estimated 350 new flats available had been sold in the four days to Sunday, according to data from developers and a Hong Kong government website.

In the secondary market, realtor Midland Realty said 11 transactions were recorded at 10 major housing estates it monitored over the weekend, 15 per cent down from 13 deals the previous weekend

Among new project launches, Henderson Land Development had sold about 32 of the first batch of 68 apartments at its small-flat development Seven Victory Avenue in Ho Man Tin as of 5pm Sunday, according to market sources. It has registered 200 interested buyers ahead of the sale.

“Prices of new flats have become higher compared to June,” said Louis Chan, managing director of Centaline Property Agency’s residential department.

Chan said Centaline recorded commission revenue more than HK$1 billion in the third quarter.

He projected 60 to 70 per cent of the first batch of units at Seven Victory Avenue would be snapped by buyers. A 161 square foot “tiny flat” was not included in the sale of the first batch of units.

Developers raised prices after generating overwhelming response at most new project launches. In September alone, more than 3,300 units were sold, the highest monthly sales figure in 10 years.

There were similar sales responses at other small flat developments over the weekend.

On Saturday, Sun Hung Kai Properties said it sold 37 of the 57 fifth batch of units at Lime Gala in Shau Kei Wan at an average discounted price of HK$19,417 per sq ft, which was about 10 per cent higher than the average launch price of HK$17,732 per sq ft early last month.

On the same day, Henderson Land sold four out of the second batch of 10 flats at One Prestige in North Point after increasing prices by 2 per cent from the first batch.

Sammy Po, chief executive at Midland Realty’s residential department, said half of the buyers at the Seven Victory Avenue development were investors.

Prices at Seven Victory Avenue were HK$19,354 to HK$24,232 per square foot for the first batch of 68 flats. Factoring in discounts of as much as 5 per cent, the price of a flat will drop to HK$18,386 to HK$23,020 per square foot, or HK$3.74 million to HK$8.09 million.

Richard Lee, chief executive at Hong Kong Property Services, said the decline in sales of second-hand homes was because owners either raised prices or held back from selling in view of the buying frenzy of new flats last month.

However, Hong Kong Property recorded two deals in the secondary market on the weekend.

“Several new projects put on sale during the National Day holiday have lured home buyers away from the secondary market. The number of weekend transactions was the lowest in the past 34 weeks,” Lee said.