Hong Kong property sales climb to three-month high

Hong Kong property sales rebounded to a three-month high in April as owners became more willing to offer big discounts, or even sell at a loss, a trend that could drag home prices down further. The value of transactions rose by about a fifth to HKD41.9 billion as the number of deals increased by more than a quarter to 4,847 from March, according to Centaline Property Agency. The transactions figures included homes, shops, industrial units and car parking spaces. Many sellers have been willing to drop their prices by as much as 12%. Their reasons for wanting a quick sale varied. Some – part of an unprecedented exodus of Hongkongers and expatriates – needed to leave Hong Kong quickly after the approval of their overseas immigration applications. Others were keen to offload their tiny units as new government size regulations are likely to ensure larger but still affordable homes come to market, undermining the value of so-called nano flats.

“While there is still robust demand keeping home prices stable during the fifth wave of Covid-19, we can see that there are some house owners who are more inclined to offer discounts to close the deals,” said Hannah Jeong, head of valuation and advisory services, Colliers Hong Kong. Owners of nano flats – tiny apartments typically smaller than 18.6 square meters – have been offering steep discounts as they upgrade to larger units. The government’s ban of flats under 280 square feet means better flats within their price range are coming to the market. Some are selling their micro flats at a loss.

Property consultancy JLL downgraded its forecast for this year’s mass residential market prices. It now expects them to drop by about 5%, having previously forecast a rise of 0% to 5%. Transactions may also have been boosted by the availability of bigger mortgage loans for first-time buyers. From February 23, the mortgages available on homes with a loan-to-value ratio of 80% increased to a maximum of HKD12 million from HKD10 million, the South China Morning Post reports.