Hong Kong property

Hong Kong new flat sales set to hit record this year in sign of strong demand, even as prices soar

The two biggest developers, CK Assets and Sun Hung Kai Properties, are likely to break their own combined sales record, as extra costs imposed by the government on used flat transactions send buyers to new homes, agencies say

PUBLISHED : Tuesday, 17 October, 2017, 5:55pm
UPDATED : Tuesday, 17 October, 2017, 5:55pm

The number of new flats sold in Hong Kong this year is set to be a record, with the two biggest developers also likely to break their combined full-year sales record, in a further sign that demand for residential property in the city remains strong despite soaring prices.

Centaline Property Agency said that in Hong Kong’s primary housing market, 14,299 new flats worth a total of HK$185.69 billion (US$24 billion) have been sold in the first nine months of this year, putting the year on track to be the best since 2004, the agency said.

“The expected total sales of new flats this year will amount to 19,000, the highest in 13 years and worth an all-time high of HK$250 billion,” said Cary Wong Leung-sing, associate director of research at Centaline.

Meanwhile, the two biggest property developers in Hong Kong, CK Assets and Sun Hung Kai Properties, sold HK$70.6 billion worth of residential property in the same period, exceeding the HK$53.1 billion last year and set to break the record of HK$74.5 billion in 2010, Centaline said.

The most popular projects developed by the two included Ocean Supreme in the New Territories town of Tsuen Wan West, with 1,141 units sold worth a combined HK$12.76 billion; the Park Yoho Genova complex in Yuen Long, where 516 units were sold for a total of HK$4 billion; and the Clear Water Bay development of Mount Pavilia, at which 86 units were sold for a total value of HK$1.53 billion.

The ratio of new flat transactions to total sales will remain as high as 30 per cent, because of the various extra costs associated with used flats as a result of government market-cooling measures that have been introduced since 2010, analysts said.

“Most potential buyers now cannot afford down payments even though they can pay mortgages,” said Thomas Lam, head of valuation and consultancy at Knight Frank.

“As used flats became more expensive with down payments as well as stamp duties, agency fees and other costs, potential buyers are more inclined to go for new flats, which are priced more attractively [and often come with] good mortgage deals,” Lam said.