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Sales Transactions in Hong Kong hit record lows whist China faces unpredictable future
Only one property transaction was recorded at 10 major housing estates during the lunar New Year holidays in Hong Kong making it the lowest on record compared to 2005 where 71 deals will brokered during the same five day period.
Sino land and Hopewell Holdings also managed to sell three flats at the Avenue phase 2 with two units bought by one investor.
Developers have started to offer attractive benefits to buyers many of which help offset the impact of the government cooling measures explains Anthony Hindmarsh head of Qi-Homes property consultants Ltd in Hong Kong. Developers are offering discounts of up to 20% whilst some offering cash rebates of up to 1% to off set agency fees.
Many buyers have held back since the government imposed its toughest restrictions yet in Oct 2012. About 46,000 homes changed hands in the first 11 months of 2013 down from 78,000 in the same period in 2012.
Units at The Avenue developed by Sino land and Hopewell Holdings sold at an average of 20,000 per square foot after discounts says Hindmarsh the developer have sold more than 900 units after putting them on the market in November. Many buyers considered the sale price to be very attractive as these units could have easily sold for 25,000 per square foot under normal circumstances.
The Austin, a luxury apartment project in Kowloon West developed by New World Development and Wheelock sold 576 units at discounts are as much as 20%.
Record low mortgage rates and shortage of supply has been the cause of the record high property prices in Hong Kong before the government imposed the restrictions and stamp duties explains Hindmarsh. Some financial analysts predict the Hong Kong property market falling at least 30% by the end of 2015 however Anthony remains skeptical primarily because many landlords in Hong Kong are not in a rush to sell and would rather rent their properties to ride out the storm.
Developers are rushing to sale luxury properties which have been hardest hit by the government cubs due to the fact that many buyers from overseas such as wealthy mainland Chinese now face an extra 15% tax and tighter mortgage rules imposed by the central bank, now required for more expensive homes. Hutchison Whampoa have sold three houses with areas of over 5700 ft.² in the upmarket Victoria Peak area for a combined total of HK$1.8 billion with another four houses in the project being released for sale.
Whilst property prices in the Hong Kong trickle-down prices in mainland China have risen to record highs with property prices in Shanghai set to keep rising particularly for luxury properties in sought after areas, this is despite the introduction of new taxes and cooling measures. With no further cooling measures planned in the short term by the central committee in China land in core areas of first and second tier cities will continue to be seized by cash rich developers.
Anthony predicts that residential prices in first tier cities will continue to grow whilst super luxury home prices will be suppressed with decreased sales as signs that some investors and wealthy buyers may have reached the limit in terms of prices. The luxury market is being influenced by the economic recession in Europe and the United States says Hindmarsh arrivals of managerial level expats in Shanghai decreased significantly. In the third quarter of 2013 leasing demand weekend whilst the occupancy rate fell to 94.1%.
Some second-tier cities have already shown price corrections such as when Whenzhou and Dongguan where as some have seen the price surges such as Haikou with high speculation activity.
For more information about purchasing property in Hong Kong please contact Anthony Hindmarsh or any of his team of property consultants.
Qi-Homes specializes in the sale and purchase of property throughout the Hong Kong Island the area and can assist you with mortgages, renovations and property management.
For more information visits : http://www.qi-
QI-HOMES PROPERTY CONSULTANTS LIMITED