Hong Kong home sales reach four year high as investors join buying spree

Hong Kong developers pushing new home projects at lower prices stirred up a frenetic buying spree for small flats in September, boosting total residential transactions to a four-year high.

Hong Kong’s Land Registry said overall property deals in the city, including flats, shops and car parking space, rose 27.9 per cent month on month to 9,504 in September and recorded 73.8 per cent growth year on year.

Driven by brisk sales of new flats, Centaline Property Agency said the number of residential transactions surged 34.4 per cent to 7,826 last month.

“The number of residential transactions is the highest since October 2012,” said Wong Leung-sing, associate director of research at Centaline Property Agency.

Total transaction value for homes amounted to HK$55.96 billion in September, the highest level since July 2014.

Last month alone, the number of transactions in the primary market totalled 3,461, up 110 per cent from August. The total value of primary transactions reached HK$28.1 billion last month, up 85.9 per cent from August.

Derek Chan, head of research at Ricacorp Properties, attributed the surge in sales to an overall improvement in sentiment and a growing number of investors buying several properties at once.

“We heard from our frontline sales agents that more bulk purchasers turned up in small flat developments as they cost a smaller lump sum amount,” he said.

Separately, a 1,462 sq ft unit with a roof top sold for HK$8,208 per square foot, or HK$12 million, in Kingswood Villa, Tin Shui Wai, setting a new record in terms of value in the housing estate, according to agents.

Home sales showed signs of recovery in August with strong buyer response in most new project launches. Wang On Properties launched its joint venture development, The Met.Blossom in Ma On Shan, with most flats priced at about HK$3 million. The cheapest, a 221 sq ft unit, sold for HK$2.76 million. Then Sun Hung Kai Properties’ low price tactic drew more than 16,500 potential buyers for its Grand Yoho in Yuen Long.

Buying sentiment reached a new high on the weekend of September 3-4, with more than 1,000 new flats in three projects being sold over the two days.

Last month transactions in the primary market were dominated by three projects.

Centaline said there were 630 registered deals worth a total of HK$2.42 billion at The Met.Blossom, followed by 580 transactions worth HK$4.57 billion in Grand Yoho, Yuen Long and 499 deals worth HK$3.78 billion at Chinachem group’s Papillions development in Tseung Kwan O.

For the third quarter, Midland Realty said overall property transactions in Hong Kong increased 25.8 per cent from the previous quarter to 22,288. Total value in the third quarter amounted to HK$158.4 billion, up 21.27 per cent from the second quarter.

But Chan expects transactions for new flats to drop by about 20 per cent in October given that developers have adopted more aggressive pricing strategies for new launches and have raised prices for remaining units in new projects.

“Sell-through rates are lower in recent new project launches. Previously, we saw new projects could clear all units in the first batch but now only about 50 per cent [are sold] on the launch date,” he said.