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Hong Kong property transactions expected to fall 11.6 per cent in July, with coronavirus third wave hurting demand

By Sandy Li

/ SCMP |

July 16, 2020 1:38 PM SGT

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Property transactions in Hong Kong, including those involving homes, shops, industrial units and car parks, are expected to fall this month, as a third wave of coronavirus cases adds to the woes of a sector already hit hard by economic recession and rising unemployment.

Centaline Property Agency forecast on Sunday that transactions will fall by 11.6 per cent month on month to 7,300 deals in July, and the total transaction value will decline 10.4 per cent to HK$63 billion (US$8.1 billion). The agency said it expected the number of sales involving old homes to drop 14.6 per cent to about 3,800 deals, while the number of deals involving new flats were expected to decline 39 per cent to 1,300.

In June, overall property transactions stood at 8,254, and were worth a total of HK$70.3 billion, according to Land Registry data.

"It is hard to determine when market activity will return to normal," said Patrick Tsang, senior sales manager at Centaline's Taikoo Shing branch. "We have seen fewer people viewing flats over the weekend, as most preferred to stay away from public places." He, however, added that homebuyers will show up if flats were offered at steep discounts.

Starting this weekend, Hong Kong has reverted to tighter social distancing rules, after 61 cases on Saturday and 58 cases on Sunday were either confirmed as infected, or had tested positive on a preliminary basis. On Saturday, Dr Chuang Shuk-kwan, head of the Centre for Health Protection's communicable disease branch, said the city's third wave was by far its most serious public health crisis to date. The surge takes Hong Kong's Covid-19 tally to 1,469, with seven related deaths.

Ricacorp Properties, another agent in the city, said flat viewing appointments had dropped 6.8 per cent to 1,295 reservations this Saturday and Sunday. "It is the lowest in the past 13 weeks," said Derek Chan, head of research at Ricacorp.

The average price for old homes dropped to HK$8.32 million in the first six months of this year, down 7.5 per cent from a peak in the first half of 2019, Ricacorp said. Old homes on Hong Kong Island cost the most, at HK$12.57 million on average. In Kowloon, they cost HK$7.95 million and HK$6.9 million in New Territories, the agency said.

Sales of new flats over the weekend failed to match the buzz of previous weeks. Wheelock Properties said it sold 85 units, or 53 per cent, of the 160 units on offer at its Koko Hills project in Lam Tin, while CK Asset Holdings sold 97 of the 285 units on offer in the third round of sales at its Sea To Sky complex at Lohas Park in Tseung Kwan O.

Ricky Wong, Wheelock's managing director, said on Sunday the company had no immediate plans of releasing a second round of units at Koko Hills.

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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