Hong Kong property buyers reacted with caution to new mortgage caps, luxury property taxes and government land auctions. While the recent round of market cooling measures may have slowed September sales, buyer interest is already bouncing back with newly launched projects quickly selling out. See the following article from Property Wire for more on this.
Real estate sales in Hong Kong fell 19% in September from a month earlier, reflecting a slowdown in the city’s red hot property market amid new government measures aimed at reining in rapidly rising home prices.
The latest figures from the Land Registry recorded a total of 13,749 transactions for the month, down from 16,946 in August, and down 4.8% from 14,437 a year earlier.
In August, the government auctioned a number of additional sites for residential development as part of its efforts to increase land supply to cool the local property market, where prices have risen 15% so far this year following a 29% jump in 2009.
The government has held seven land auctions in the fiscal year ending March and plans to sell another site later this month, in one of the most active land auction schedules in recent years.
Claim up to $26,000 per W2 Employee
- Billions of dollars in funding available
- Funds are available to U.S. Businesses NOW
- This is not a loan. These tax credits do not need to be repaid
Apart from increasing land supply, other cooling measures introduced include higher taxes on luxury homes to curb speculative demand. It also capped mortgages for homes valued at HK$12 million or more at 60% of their value. It had previously capped mortgages at that level for homes valued at HK$20 million or more.
However, while the measures initially made some homebuyers more cautious and reduced transactions in the secondary property market, the recent launch of new property projects is continuing to attract demand.
Over the recent three day holiday weekend for China’s National Day, Hong Kong’s two largest property developers by market capitalization took in more than HK$11 billion in sales from two major residential projects in the New Territories.
Businessman Li Ka-shing’s property flagship Cheung Kong (Holdings) revealed that it sold HK$7.6 billion worth of apartments at its Oceanaire project in Ma On Shan, at an average price of HK$6,246 per square foot, in line with market rates in the area. It sold all 1,143 units at the development over the three day period, helped by the attractive prices, analysts said.
Meanwhile, Sun Hung Kai Properties said it sold 127 out of 132 homes at the first phase of its Valais complex in Sheung Shui, in northern Hong Kong near the Chinese border. The sales over the holiday weekend brought in more than HK$4 billion for the developer.
‘The overwhelming response to Oceanaire and Valais reflects strong homebuyer demand for both luxury and mass market flats in Hong Kong,’ Goldman Sachs analysts wrote in a note.
Analysts said market interest in the sector remains generally bullish and that the weak September data, which actually accounted for sales from the middle of August to the middle of September because of a typical two week delay in registering transactions, reflected caution following the August cooling measures.
They said transaction volumes began to pick up in the second half of September, which will be reflected in October’s data.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.