Hong Kong posts mixed weekend sales results as home buyers are spoilt for choice amid supply glut and easy financing options

By Cheryl Arcibal cheryl.arcibal@scmp.com / https://www.scmp.com/business/article/3098452/hong-kong-posts-mixed-weekend-sales-results-home-buyers-are-spoilt-choice?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp&utm_content=3098452 | August 25, 2020 12:06 PM SGT
Hong Kong's weekend home sales were mixed as buyers snapped up flats at a relatively new project in Tuen Mun while giving their collective cold shoulder to the double-digit discounts offered at scores of flats left unsold since December in Cheung Sha Wan.
Henderson Land Development, the marketing agent for the Seacoast Royale in Tuen Mun, sold 165 of 168 flats, or 98 per cent of the offer, at 7pm today, with about 66 bidders clamouring for every available unit. In Cheung Sha Wan, China Evergrande managed to sell only 11 units of 85 apartments on offer, extending its sales slump since December.
The mixed result, coming as Hong Kong's coronavirus cases fell to double digits for the 20th day, shows how a glut of residential property - both newly built and pre-owned - are spoiling buyers with options, giving them the chance to pick and choose. Flats costing less than HK$10 million (US$1.3 million) and eligible for higher bank financing are the most sought after, as interest rates remain low while global central banks slash the cost of funds to kick start ailing economies, agents said.
"Units priced between HK$4 million and HK$5 million still enjoy solid demand from both end-users and investors," said Sammy Po, chief executive at residential division at Midland Realty.
Potential home buyers at the sales office in Mira Place One in Tsim Sha Tsui for 185 flats of Seacoast Royale on sale on 1 August, 2020. Photo: Xiaomei Chen alt=Potential home buyers at the sales office in Mira Place One in Tsim Sha Tsui for 185 flats of Seacoast Royale on sale on 1 August, 2020. Photo: Xiaomei Chen
Prices at the latest batch Seacoast Royale, developed by Empire Group Holdings and Hong Kong Ferry (Holdings), started at HK$3.68 million, or HK$13,806 per square foot, going up to HK$8.6 million with a 6-per cent a discount. One buyer spent HK$12.8 million on two flats at Seacoast, said Henderson's general manager Thomas Lam, declining to identify the customer.
"With low interest rates and lots of liquidity, we expect prices to increase between 10 and 15 per cent over 2021," said Victoria Allan, managing director and founder at Habitat Property, which was uninvolved in today's sales. "The market will be relatively flat for the rest of the year as we go in and out of waves of Covid-19 and start to increase in early to mid 2021."
Evergrande fared much worse at The Vertex. The developer cut the catalogue price by up to 12 per cent, leaving a flat measuring between 224 and 639 square feet to cost between HK$5.44 million and up to HK$13.07 million.
Still, buyers were unmoved. "Buyers have already bought the cheaper one-bedroom flats during the previous sales" that began eight months ago, said Po. "Similar-sized units on higher floors are more expensive. The project is not as attractive compared with the newly launched [projects]."
Besides contending with the city's unprecedented recession brought on by the coronavirus pandemic and partly by last year's anti-government protests, investors remained wary of the impact of the National Security Law, said Allan of Habitat.
"Demand dropped slightly with the announcement of the National Security Law as people adjusted to the new law and are waiting to see how it would impact financial markets," she said. "As the market began to get more active, an increase in Covid-19 cases hit. Both have definitely dampened sentiment although there has only been a minor impact on prices of around 5 per cent."
With lower number of Covid-19 cases in recent days, Allan said a pick up in inquiries has been seen, particularly from buyers seeking to upgrade and expand from their current abodes.
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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