Buyers remain hesitant to purchase property amidst an uncertain economic environment.
Total consideration of property sales plummeted 45.7% YoY to $54b in July, but inched up 0.3% compared to June, according to the Land Registry.
Similarly, the number of property sale and purchase agreements crashed 24.6% YoY to 6,380 sales in July but climbed 2.7% from June.
Also read: Property sales down 1.5% in H1
Sales and purchase agreements for residential units diminished by 21.1% YoY to 4,805 sales but rose 3.8% compared to June. However, total consideration slipped to $44.1b, down 2.8% from June and lower by 32.4% YoY.
The 12-month moving average for July was 6,144, 2.7% lower than the 12-month moving average for June and lower by 18.8% YoY.
A report by Savills noted that residential demand may pull back over the next three to six months due to the recent trade woes and Hong Kong’s moderate GDP growth pace. In particular, high-net-worth individuals (HNWIs) may be rethinking their asset allocation strategies and have adopted a wait-and-see attitude.
On the other hand, Knight Frank reported that it expects the residential property market to stabilise. The report noted that mass home prices may undergo some adjustment due to the Hang Seng Index (HSI) having dropped close to 10% since May, a projection based on earlier trends of residential property prices following HSI movements.
“Despite the worsening economic outlook and the potential for capital to out of the region, we expect the Hong Kong residential markets to remain resilient,” David Ji, director of head and research consultancy for Greater China, said in the report.
Apart from home buyers, land developers are also hampered by the recent social unrest in Hong Kong as well as recent policies put in place to discourage speculation in housing. Recently, a Kai Tak site sold for $12.7b, the cheapest land sale in three years.
"With the impending vacancy tax, a slow flat sales performance would potentially dampen developers’ profit, as such discounts have been taken into account in land bid prices,” said Thomas Lam, executive director of valuation and advisory at Knight Frank Hong Kong, in a statement to real estate news source Mingtiandi.
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