Transactions of government subsidised homes sink to record low in October as property market wobbles

Hong Kong’s falling private housing prices are weighing heavily on the sales of government subsidised homes.

The number of transactions of used Home Ownership Scheme (HOS) flats fell to 180 in October from 451 in May – the lowest since records began in 1996, according to data from Ricacorp Properties. Transaction volume also fell by nearly 60 per cent from HK$2.3 billion to HK$930 million in the same period.

Hong Kong’s private home prices fell by a combined 1.5 per cent from July to September, according to data from the Rating and Valuation Department after the 28-month rally came to an end in July.

Data from Midland Realty showed that overall transactions - both private and government subsidised flats sank 60.7 per cent from 4,976 in May to 1,957 in October.

“Buyers’ confidence has been very much affected because of the US-China trade war, plunging stock market and larger discounts for newly launched HOS flats,” said Derek Chan, head of research at Ricacorp.

The market took time to digest Chief Executive Carrie Lam Cheng Yuet-ngor’s policy measures announced in late June aimed at bringing more affordable housing supply, including cutting prices of Home Ownership Scheme flats by 18 per cent. But prices have eventually moved lower.