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

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.