Hong Kong’s real estate buyers turned out in droves for the third consecutive weekend, as they shrugged aside the Trump administration’s threat to strip the city of its special trade status amid escalating US-China tension.
Sales results were mixed at two developments in different parts of the city. Sun Hung Kai Properties (SHKP), the city’s largest developer by market capitalisation, extended last weekend’s sell-out streak and sold 200 of the 209 flats offered in the third batch of Phase II of its Wetland Seasons Park project in Tin Shui Wai as of 8:30pm, according to Midland Realty. Wheelock & Co., the fourth-biggest developer, managed to find buyers for only three of the 101 apartments at the more expensive Ocean Marini complex in Tseung Kwan O, agents said.
“Wetland Seasons Park sold well, reflecting real demand from the market, said Midland’s residential department chief executive Sammy Po, adding that he expects the current batch to sell out. “Those on offer at Ocean Marini are the last batch of the project, which has been up for a while. That’s why the response is [lacklustre].”
The mixed results underscore how Hong Kong’s previous residential property bull run has given way to a buyers’ market, as investors now get to have the pick of the best locations with the biggest discounts in an economy mired in its worst recession o record. The most recent government data showed the transaction value of new and second-hand homes tumbling by 52 per cent in April, compared with last year. The Centa-City Leading Index, which tracks the prices of used homes, fell 6 per cent in April, from a record in June 2019
Escalating tension between the United States and China has added more weight on the property industry, as more buyers held off on making large financial commitments amid rising political uncertainty and job insecurity. Hong Kong’s economy is projected to shrink 7.5 per cent in the second quarter, putting it on course for a 4.8 per cent contraction this year, according to Standard Chartered.
The city’s real estate slump stands in sharp contrast with mainland China, where a central bank injection of liquidity for post-coronavirus economic stimulus has found its way into the property market, spurring the bounceback of prices in some of the biggest cities. Prices had been rising so quickly in Shenzhen that the city’s Housing Authority was compelled to boost supply in the second half of the year to rein in prices.
The Ocean Marini flats on offer by Wheelock are priced at between HK$8.72 million (US$1.12 million) to HK$18.74 million, with a total sales value of HK$1.33 billion. The units, with areas of 541 to 1,062 square feet, are sold for between HK$15,001 and HK$23,323 per square feet after a 22 per cent discount.
SHKP’s Wetland flats are being offered for between HK$4.04 million to HK$18 million, or a price range of between HK$11,358 and HK$14,938 per square feet. The developer sold 98 per cent of the flats on offer last weekend.
In an indication of the strong demand, a total of 7,631 buyers put down a deposit to enter a lottery for the 298 flats at Wetland Seasons Park last weekend. The flats, located in northwestern New Territories, were priced at HK$10,842 to HK$15,670 (US$2,021) per square foot, with sizes ranging from 331 to 816 square feet (76 square metres).
Get the China AI Report 2020, brought to you by SCMP Research. Learn about the AI ambitions of Alibaba, Baidu & JD.com through our in-depth case studies, and explore new applications of AI across industries. The report also includes exclusive access to webinars to interact with C-level executives from leading China AI companies (via live Q&A sessions). Find out more.
More from South China Morning Post:
- Hong Kong’s tycoons catch the privatisation bug as they pick up assets at rock-bottom prices amid stock market’s slump
- Developers will hold flats rather than sell below cost, says Wheelock chief