Hong Kong’s property market has witnessed another robust weekend as buyers grabbed all units on offer at a New World Development project, as the government signalled the city’s recession is abating.
Homebuyers bought all 181 units on offer at The Pavilia Farm development in Tai Wai at 5.35pm local time on Sunday, according to property agents. The sell-out repeated the feat last weekend, the market’s best performance in a month, despite an average 14 per cent price mark-up.
The brisk take-up reflects pent-up demand among city dwellers, shrugging off weak sentiments surrounding the weak local job market and recent lay-offs at Cathay Pacific Airways. Financial Secretary Paul Chan Mo-po suggested the city’s recession abated last quarter.
Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.
“As the pandemic is increasingly under control, purchasing power is being released,” said Sammy Po, chief executive of Midland Realty’s residential division. “When there is a lot of capital and interest rates are relatively low, people still want to buy properties for investment or own use.”
Hong Kong’s economy could do with a dose of optimism, after contracting for four consecutive quarters through June 30. Writing on his blog on Sunday, Chan said the decline in third-quarter economic output should narrow with “significant improvement” in exports in September.
The Pavilia Farm will have 3,090 units in total, stretched over a seven-year development. The project counts transport convenience and large-scale shopping facilities among its selling points, Po said.
New World Development sold 391 units in the first round last weekend. After selling 181 units on Sunday, another 197 go on sale on Monday. In total, these flats attracted more than 21,000 registrations of interest from prospective buyers.
The units range from 278 to 835 square feet, and are priced at HK$21,560 (US$2,782) per sq ft after discount.
New World’s project sells out in Tai Wai as discounts and location draw homebuyers to ignore oversupply and recession
Sales over the last two weekends come as a relief for Hong Kong’s property market, which has taken a beating in recent months as prices slipped amid rising unemployment. Record job cuts at Cathay Pacific last week also contributed to the downbeat sentiment on sales and rents.
“Around 70 to 80 per cent of our clients today are people who registered last time but were not successful in making purchases the last time out,” said Louis Chan Wing-kit, Asia-Pacific vice-chairman and chief executive of the residential division at Centaline Property Agency.
One investor spent HK$70 million snapping up three, three-bedroom flats, while another client bought four units worth HK$50 million, Chan added.
“The second phase of The Pavilia Farm could be launched in November, while several new property projects could also come on to the market,” said Chan. He expected around 2,000 new home transactions next month.
“Favourable sales will push up prices of real estate in the secondary market, by about 3 to 5 per cent, in the fourth quarter,” he predicted.
More from South China Morning Post: