Sales in the $10 million-plus (HK) property market have slowed according to a new report, and experts speculate potential buyers are waiting for an October government address that will address the country’s housing policy. Prices also fell 0.5% for September, which apparently was not enough to spur any growth, with sales falling 11.3% in the same month. Areas that are short on supply are still commanding high prices and Hong Kong’s economy is very robust, which are good signs that sales and prices will balance out once the news of future policy decisions are settled. For more on this continue reading the following article from Property Wire.
Luxury property buyers in Hong Kong are adopting a wait and see attitude because of stock market volatility and rising mortgage rates, according to Knight Frank’s research team in China.
Hong Kong’s Land Registry reports that sales volumes fell 11.3% in September, hitting its lowest level since February 2009. Yet, despite this, luxury residential prices fell by only 0.5% compared with 2% a month earlier.
Many buyers are thought to have delayed their decision to purchase until after the government’s October Policy Address which sets out future housing policy, the research team said.
The HK$10 million plus apartment market was the hardest hit in September with sales volumes in this sub-market declining by 63.8% month on month.
Luxury home prices on The Peak, on Island South and Pokfulam showed the greatest resilience with prices holding firm compared with marginal price falls in Jardine’s Lookout and Happy Valley.
Where supply remains constrained, record prices are still being achieved, particularly within the new homes sector. According to the research team, a flat in the Laguna Verde development in Hung Hom reportedly sold for HK$11.8 million or over HK$11,370 per square foot. Similarly, at La Splendeur in Tseung Kwan O, 450 units were reportedly sold within 48 hours of the development’s launch, the majority to owner occupiers.
In terms of luxury rents, the Hong Kong market is now entering its traditional low season prompting many landlords to reduce their rents in order to secure tenants quickly. As a result, rents for Hong Kong’s luxury homes fell by 1.7% month on month, the first fall since December 2009.
Despite the fact that five new sites capable of supplying 1,770 new homes have been identified by The Development Bureau, these homes will take four to five years to come to the market. This suggests that Hong Kong’s housing shortage looks set to remain in the short to medium term, said Knight Frank.
Economically, Hong Kong continues to perform strongly. In August unemployment fell to 3.2%, its lowest rate since 1998, and GDP is forecast to reach 5.5% in 2011.
‘Looking forward, the government will continue to increase land supply. The Development Bureau announced that five residential sites in Tseung Kwan O, Tuen Mun and on Lantau Island, expected to provide a total of 1,770 residential units, will be available for tender in the fourth quarter.
However, the housing shortage problem will not be solved in the short term, because it will take three to four years for the flats to be completed,’ the report concludes.
This article was republished with permission from Property Wire.