Hong Kong housing

Hong Kong’s new flat sales surge to 22-year high with HK$37.5 billion total for April

PUBLISHED : Monday, 01 May, 2017, 6:14pm
UPDATED : Monday, 01 May, 2017, 10:59pm

Sales of new flats in Hong Kong surged to a 22-year high to HK$37.5 billion (US$4.82 billion) in April, driven by a rising number of big-ticket transactions and accelerated market launches by developers, according to property agents.

Centaline Property Agency forecast that there would have been 2,700 registered transactions in the primary market last month, 90 per cent more than the 1,412 deals recorded for March. The estimated value of transactions would correspondingly have increased 81.8 per cent to HK$37.5 billion in April, the highest since July 1995.

Agents also believed that the pace in which units were snapped up was faster in the first two weeks of April, compared with the rest of the month. The slower pace subsequently could be due to a new government policy imposed to curb investment demand on April 13. Any local first-time buyer of multiple units in one contract must now pay a 15 per cent stamp duty for each flat, finally closing a legal loophole left open since November 2016.

“Sales response of new flats may have slowed a bit after the new tax policy, but [the move is] unlikely to suppress demand from end users,” said Wong Leung-sing, associate director of research at Centaline.

Nonetheless, transactions in which buyers purchase several properties in the same contract almost grounded to a halt after the tax took effect, said Wong.

Sales response of new flats may have slowed a bit after the new tax policy, but [the move is] unlikely to suppress demand from end users
Wong Leung-sing, Centaline Property Agency

In reiterating the government’s position, Financial Secretary Paul Chan Mo-po on Sunday warned homebuyers and those who provided their names for multiple transactions to evade the extra stamp duty that such an act was criminal.

“If buyers deliberately make a false statement to the Inland Revenue Department, they violate rules under the Crimes Ordinance. If convicted, they face imprisonment for up to two years and fines,” Chan wrote in his blog.

Last month, Sun Hung Kai Properties Cullinan West development atop Nam Cheong Station was the most sought after among new projects put on sale. The development recorded 652 transactions worth HK$10.86 billion (US$1.4 billion). This was followed by Wheelock Properties’ Monterey development in Tseung Kwan O, where 557 flats worth an estimated value of HK$7.4 billion (US$95 million) were sold, and the sale of 231 units totalling HK$2.34 billion (US$30 million) at Vibe Centro, a residential project built by Poly Property Group in the Kai Tak area.

The total residential transactions, however, would have better reflected the market activities in March than in April due to the four-week time lag between transactions and registrations.

One notable transaction in late March came from a family of three members who bought 11 units at Cullinan West. Their total shopping bill was HK$230.4 million.

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Overall property transactions including shops, car parking lots, industrial units, saw a month-on-month 16.4 per cent growth to 8,850 deals in April, said Centaline. The value of transactions would increase to HK$88 billion, about 42.9 per cent higher than HK$61.6 billion in March.

In the secondary market, the number of residential transactions would have risen above the 4,000 level in April, according to estimates by Midland Realty.

The Land Registry has yet to release the official data for April.

Separately, Far East Consortium said it planned to release 110 units - with floor areas ranging from 277 sq ft to 538 sq ft - at Marin Point, its new project in Sha Tau Ko in northwest New Territories for sale on Friday. The flats will be offered for sale starting from HK$2.59 million.