Hong Kong’s sales agents face a bleak year end, with 8,000 jobs on the line, as months of rallies crimp property transactions
- Analysts say Hong Kong’s property market this year will see the least number of deals since the Sars outbreak in 2003
- Homeowners are cutting prices by at least 10 per cent in the hope of making a sale
Some 8,000 agents face “elimination” as the prolonged protests and US-China trade war hasten the decline in Hong Kong’s property prices and shrink transactions amid a lack of buying interest.
“In the last two weeks, the extent of decline has sped up,” said Sammy Po, chief executive of the residential division at Midland Realty, adding that some homeowners were willing to slash prices by 10 per cent or more in the hope of finding buyers quickly.
“There are about 40,000 agents. We estimate there will be a total of about 4,000 to 5,000 deals a month, which means about 10 agents will compete for each deal [per month].”
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The secondary market will be the hardest hit, with only about 40,000 deals taking place this year, the lowest since records began in 1996, said Freddie Wong, chairman of Midland Holdings.
“The number of deals [of used homes] will be worse than when Sars occurred,” Wong said, adding that they were likely to drop by 13 per cent this year. Some 46,131 deals were completed in 2003.
Midland said the asking prices of around 4,072 listings had been cut as of Monday, up 58.6 per cent from June 1, before the extradition bill controversy erupted.
It said its net profit for the six months ended June 30 plunged 37.8 per cent to HK$93.6 million (US$11.93 million) on the back of significantly higher rental expenses and commission rebates because of intense competition, according to its filing to the Hong Kong stock exchange on Wednesday.
Meanwhile, rival Centaline Group, which is not listed and has around 50,000 staff in 61 cities, also reported a 21 per cent slump in first-half profit to HK$504 million compared to a year earlier.
The poor results come after the city’s official home price index dropped 0.8 per cent in June.
The timelier Centa-City Leading Index fell 1.1 per cent from the end of June to August 18.
In the worst of three scenarios outlined by DBS Bank, property prices could plunge between 20 per cent and 30 per cent next year if the violence continues to escalate.
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Other segments of Hong Kong’s property market will also be affected from the headwinds, said Daniel Wong, chief executive and executive director at Midland IC&I, a separately listed agency associated with Midland Holdings.
In the worst scenario, prices of office buildings and shops could sink by 30 per cent by the end of next year, while prices of industrial properties could decline by 20 per cent, said Wong.
Midland IC&I said its net profit for the six months ended June dropped 58 per cent to HK$20.97 million.
“The transaction volume of industrial, office and retail properties this year could be down 40 per cent on year to 5,200, the lowest ever since records began in 1996,” said Wong.
Meanwhile, an investor made a loss of 14.4 per cent on the sale of a parking space at Kingswood Villas in Tin Shui Wai. The space, which was bought for HK$1.33 million less than four months ago, was sold for HK$1.14 million on Wednesday, according to Centaline.
