Flat viewings dwindle, transaction volume slumps as coronavirus infects some residents in Hong Kong housing estates

By Lam Ka-sing kasing.lam@scmp.com / https://www.scmp.com/business/article/3048724/flat-viewings-dwindle-transaction-volume-slumps-coronavirus-infects-some?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | February 4, 2020 2:54 PM SGT
The coronavirus outbreak is hurting Hong Kong's residential property market as flat viewings dwindle and transaction volume shrinks in private housing estates where some infected residents were detected by health authorities.
The pain is being felt amid scenes of city residents making a beeline for face masks at local pharmacies and empty shelves in neighbourhood supermarkets over the past week. Early signs of market revival now seem short-lived as the virus that originated from Wuhan in central Hubei province has claimed more than 420 lives and infected at least 20,000 people, mostly in mainland China.
Hong Kong has 15 confirmed cases and the government has put in place travel restrictions to help contain the epidemic. The Department of Health had earlier revealed that some of the cases were discovered in estates including South Hillcrest in Tuen Mun, Tseung Kwan O Plaza and Oceanaire in Ma On Shan. A 39-year old resident in Whampoa Garden became the first fatality in Hong Kong, the Hospital Authority said on Tuesday.
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South Hillcrest in Tuen Mun. Photo: Handout alt=South Hillcrest in Tuen Mun. Photo: Handout
Transaction volume of homes across Hong Kong in the first half of February is poised to shrink by 50 to 80 per cent amid the epidemic, said Louis Chan, Asia-Pacific vice-chairman and chief executive of residential division at Centaline Property Agency.
"Apart from affecting daily life, it also greatly affects flat viewings of used homes," Chan added. "It will be down 70 to 80 per cent from viewings in normal times. Developers are also likely to postpone project launches because of the epidemic."
In South Hillcrest, where authorities said an old couple from Wuhan had stayed in mid-January, there have been no transactions since early last month, according to Matthew Lau, senior district sales manager at Centaline, who manages the Siu Hong Station branch that is closest to the housing estate. There has not been a single flat viewing at the estate in the last two weeks, he said.
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Flat viewings and transaction volume in Tseung Kwan O Plaza are expected to fall by at least 70 per cent, according to Ken Lau, assistant district director at Hong Kong Property (Services). The health department has identified an infection case involving a 55-year old man in the housing estate.
Before the news about the patient became public, a 761-sq ft flat in the estate had changed hands at HK$12.1 million (US$1.56 million) or 4 per cent below the indicative market price. Prices may drop further as potential buyers shift to alternative projects or locations, he added.
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"If you [buy homes] for your own use, you definitely want a safe place," added Lau of Hong Kong Property said.
At Universal Towers in North Point where a 47-year-old patient lived, viewings and transaction last week sank by 50 to 60 per cent compared to the same time last year, said Edwin Ho, an agent at Centaline. Buyers may have looked elsewhere, he said.
"Because of the epidemic, social movement and US-China trade war, the number of flat viewings in this [North Point] district has obviously shrunk under macroeconomic factors, Ho said. "In case the epidemic spreads, a wider part of the market could be affected."
Similarly, flat viewings and transaction volume have declined by 30 per cent and 50 per cent respectively at Oceanaire, a project located in Ma On Shan, according to Lok Wong, Midland Realty's chief senior sales manager. A 56-year-old man who lived there was infected by the coronavirus, the government said.
One buyer decided against buying a 736-sq ft flat there for HK$10 million, after becoming aware of the infected case in late January.
Wong however expects interest to recover as soon as the epidemic is controlled, referring to the Sars (severe acute respiratory syndrome) outbreak in 2003 in Hong Kong that lasted for about five months. Some buyers are already looking out for bargains, he added.
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.
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