Hongkongers come out in droves to buy property even as developers steadily raise prices amid improving confidence

Hong Kong homebuyers snapped up dozens of new flats on Sunday, in a bumper weekend of home sales amid easing fears over a fourth wave of the coronavirus outbreak and resilient demand from first-time homebuyers.

Hong Kong Ferry Holdings and Empire Group had sold 85, or nearly 70 per cent, of the 123 flats on offer in the second phase of Starfront Royale in Tuen Mun as of 8pm, agents said. More than 3,600 people registered for a lottery to buy the flats, translating into 29 buyers vying for each available unit.

"Buyers' purchasing power has been unleashed since the coronavirus outbreak has been largely brought under control," said Sammy Po Siu-ming, chief executive of Midland Realty's residential division. "The overall low-interest-rate environment has also contributed to an abundance of cash in the market."

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The successful sale came a day after rival New World Development (NWD) recorded its third sell-out weekend at The Pavilia Farm in Tai Wai, New Territories. The developer sold all 337 units on offer on Saturday at an average price of HK$19,800 per square foot.

Following the sell out, late on Saturday NWD released a price list for another 343 new flats in the project's second phase, without announcing a launch date. The average price for the flats has been increased by 3 per cent to HK$20,399 from the previous batch, which was already 5 per cent more expensive than the first batch sold in early October.

The new projects' uptake points to a resilience in the mass-market residential property segment in an otherwise gloomy real estate market in Hong Kong this year, as demand from first-time homebuyers remains strong despite the coronavirus outbreak triggering the worst economic recession in the city's history. Secondary home prices, tracked by the Centa-City Leading Index, were little changed by the end of October from levels seen at the beginning of this year.

A low-interest-rate environment globally - the result of historic liquidity injections unleashed by central banks around the world in response to the pandemic - has added to the appeal of property assets, as they retain value in the long term. It also means lower mortgage costs for first-time buyers.

Property developers are set to launch many new projects in November, as the first-hand residential property market starts to recover in terms of transaction volume in the fourth quarter from the impact of lockdowns and social distancing measures.

More than 3,000 units are set to come on the market this month, based on agents' projections, compared with the 1,475 new flats that were sold in October.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.