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RESIDENTIAL PROPERTY | Staff Reporter, Hong Kong
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Home sales crash 21% in August amidst buyer pull out

The dismal market take-up translated to 4,882 sold units.

Residential property sales in Hong Kong crashed 21% MoM to 4,882 sold units in August as buyer sentiment took a blow from higher interest rate environment, according to a report by Knight Frank.

Also read: Homeowners to feel pinch as banks hike mortgage rates

On the supply side, developers sped up the release of new flats with four projects launched in August which were generally well-received, observed Knight Frank. Notable transactions include the sale of a 2,355 sq ft high floor in 39 Conduit Road at Mid-Levels West for $175m and the sale of a 2,969 sq ft high floor in Masterpiece at Tsim Sha Tsui.

A number of buyers, however, decided to forfeit deposits which was also evident in the secondary market which witnessed some buyers backing out of deals on the back of growing fears of further mortgage-rate rises and stock market volatility.

Malta has already surpassed Hong Kong for the first time in global home price gains after home prices in the Mediterranean island surged 16.9% whilst the SAR fell short at 15.9% in Q2 as the government rolled out measures to tame the city’s runaway home prices, according to the Knight Frank Global House Price Index.

Despite the policy intervention, residential property prices continued their heated uptrend for the 28th consecutive month in August although their growth rate marks the slowest in the past 10 months.  “We expect them to grow at a slower rate in the second half of the year, gaining 10-13% over the whole year,” Knight Frank added.

Knight Frank is the latest to the growing chorus expecting a slowdown in Hong Kong’s heated home market after the Royal Institute of Chartered Surveyors (RICS) expectated that residential prices may finally fall by 0.2% over the next twelve months and effectively end two years of consecutive growth.

Also read: Housing correction of 15% possible in 2019

“Remember what happened in late 2015 -- prices dropped about 13 percent in only six months, and the trigger was the Fed’s rate hike,” Joyce Kwock, head of Hong Kong property research at Nomura International (HK) Ltd. said in a briefing in Shanghai on Tuesday. “The entirely same situation may repeat again.”

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