Steep Discounts Welcome Sales for Hong Kong Property
The average price for Hong Kong property The Regent dropped to HK$12,800 per square foot after developer China Overseas Land reduced prices by 32 per cent lower than its neighbouring developments.
The Regent released the first 486 units for sale last January 5. It has convinced up to 7,500 bids, or an average of 15 buyers for every available flat. The said project with expected completion in 2021 features 1,620 units between 377 and 761 sqft.
China Overseas Land reduced its prices by up to a third, compared to other similar projects that were launched five months ago at the same neighbourhood. For instance, St. Martin by Sun Hung Kai Properties sold for an average of HK$18,698 per square foot in July, before the city’s 28-month bull run in house prices ended.
The strong demand and purchasing powers were always there. However, Sammy Po Siu-ming, Midland Realty’s residential division chief executive, said that the low prices helped the sales. Discounts in Hong Kong property prices have attracted buyers who would otherwise wait for the market to cool further.
The gradual lowering of prices underscored the downturn in the world’s most expensive residential property market. This is all thanks to the combination of government policies, rising mortgage rates, and an additional supply of units.
Huge Discounts as a Way to Attract Buyers
The strong demand amidst the lack of space in Hong Kong has made it one of the most expensive places to buy properties. However, with the property bull ending last August 2018, people are buying Hong Kong property for sale as prices go down, while some adopt a wait-and-see attitude for further price drops in the second half of the year.
This 2019, analysts forecast a deluge in unit supply to enter, with 4,279 units to enter Tai Po alone. Due to the rising supply of Hong Kong property, developers have resorted into giving steep discounts in order to lessen the competition and to achieve huge gains. According to Knight Frank’s executive director Thomas Lam, offering steep discounts is the only way to grab people’s attention.
The lowering of prices creates an opportunity for those interested in investment property in Hong Kong. Analysts predict house prices to fall by 10 to 25 per cent for 2019, lasting about six months before the property prices start to recover. On the other hand, some such as associate professor Lee Shu-Kam of Shue Yan University, predicts the home prices to crash by 10 per cent. This price drop is backed by uncertainty in the US-China trade war as well as drops in the city’s stock market.
However, the Hong Kong property market is not blowing sirens for an all-out market crash. Resilient local economic fundamentals and the pent-up demand from mainland Chinese are likely to keep the market afloat.
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