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Buyers shun new flats in Tseung Kwan O, as Hong Kong home sales slow

Buyers shun new flats in Tseung Kwan O, as Hong Kong home sales slow
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Hong Kong buyers shun new flats at Wheelock’s Park Seasons project as home sales slow in May

Home purchases in Hong Kong are slowing down after an initial spate of enthusiasm sparked by the government’s rollback of cooling measures nearly three months ago, with buyers taking only 17 per cent of new flats offered by Wheelock Properties in Tseung Kwan O on Saturday.

As of 8pm, 27 of 154 units on offer at Park Seasons in Lohas Park were sold.

The slow sales were “expected” as “many other units of the project had been sold in the previous launch”, said Sammy Po Siu-ming, CEO of Midland Realty’s residential division for Hong Kong and Macau.

Wheelock priced the latest batch between HK$4.5 million and HK$7.8 million after discounts. The average price of the units, which start at 283 square feet, rose marginally from the previous batch by 0.5 per cent to HK$15,122 per sq ft.

Enthusiasm for Hong Kong property is showing signs of abating. Photo: Dickson Lee

The developer sold 126, or about three quarters, of the 168 flats on offer last month at Park Seasons on the first day of sale. The flats comprised one to two-bedroom units between 322 and 496 sq ft, priced from HK$4.54 million to HK$7.7 million.

Wheelock said it expected sales to be slower this time. A spokesman noted that the project has “sold many units over the past few weeks”.

“We just wanted to supply additional flats for potential homebuyers and give them more options in the coming days,” he said.

The lukewarm response comes as buying interest in Hong Kong’s residential property shows signs of abating.

A total of 1,340 new homes and 2,322 lived-in units had been sold this month up to Wednesday, according to data from Ricacorp Properties.

Given the trend, the city is likely to record 1,900 transactions of new homes and 3,000 involving second-hand homes, representing a decline of 46.4 per cent and 31.7 per cent, respectively, from April, according to Derek Chan, head of research at Ricacorp.

Despite the moderating demand, “the performances of both first-hand and second-hand markets are still better than before the cooling measures were removed”, he added.

In his budget speech on February 28, Financial Secretary Paul Chan Mo-po announced the lifting of all curbs originally put in place to cool an overheated market.

Mortgage financing was eased too, with the Hong Kong Monetary Authority allowing homes valued at less than HK$30 million to be eligible for 70 per cent mortgage financing, compared with the previous cap of 60 per cent for flats valued between HK$15 million and HK$30 million.

Last month, Hong Kong’s property transactions came close to a three-year high, with 9,880 units changing hands, according to official data. It marked the second consecutive month of increase in property deals in the city.

Potential home buyers line up at a sale in March. Photo: May Tse

The April sales – the highest since July 2021 when 9,957 units including car parks, shops, industrial and office units were sold – were roughly double the number in March, which marked the first full month of a restriction-free property market.

The total value of property sales in April surged by 125 per cent to HK$83.9 billion from HK$37.4 billion the previous month.

Although “the overall market is still dominated by local buyers for the time being”, buyers from mainland China are pushing demand higher, Chan said.

“The number of mainland buyers has indeed increased significantly after the measures were lifted, generally accounting for about 30 per cent,” he said. “What cannot be ignored is that the number of mainland buyers is still increasing.”

Chan expects that Hong Kong’s residential market will continue to move “in a positive direction, while property prices will depend on the overall performance of the economy and the possibility of interest rate cuts in the second half of the year”.

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