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Buyers queue to buy 422 units at CK Asset’s Blue Coast apartments in Wong Chuk Hang. Demand for property has jumped since all restrictions were scrapped at the end of February. Photo: Xiaomei Chen
Business

Hong Kong property deals double to near 3-year high as scrapping of cooling measures spurs buying demand

  • Sales of new and second-hand homes shot up by 115 per cent to 8,551 units from March, Land Registry data released on Friday showed
  • However, property sales this month are likely to moderate as fading hopes of a cut in interest rates dampen sentiment, analysts said
Hong Kong property
Cheryl Arcibal
Salina Li
Cheryl ArcibalandSalina Li
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Hong Kong’s property transactions came close to a three-year high in April, with 9,880 units changing hands according to official data, as the removal of cooling measures continued to boost demand.
However, property sales this month are likely to moderate as fading hopes of a cut in interest rates dampen sentiment, analysts said.
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 of deals in March, which marked the first full month of a restriction-free property market. The total value of property sales surged by 125 per cent to HK$83.9 billion (US$10.7 billion) from HK$37.4 billion the previous month.

Sales of new and second-hand homes shot up by 115 per cent to 8,551 units from March, Land Registry data released on Friday showed.

“Previously cautious buyers have actively entered the market since the withdrawal of market cooling measures,” said Eddie Kwok, executive director, valuation and advisory services, at CBRE Hong Kong. “We have also observed that investors and non-local buyers are returning to Hong Kong’s housing market – they are mainly mainland residents at the moment.”

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How Hong Kong's housing market became among the world’s most unaffordable

How Hong Kong's housing market became among the world’s most unaffordable
The higher demand from mainland Chinese residents came thanks to the withdrawal of the New Residential Stamp duty, which allows the purchase of additional properties without paying extra stamp duty, as well as the removal of the Buyer’s Stamp Duty that was meant to levy non-permanent residents, Kwok said.

Various government schemes to attract more talent into Hong Kong is also helping investment sentiment, he added.

In March, when property transactions rose by more than half to 5,013, home prices climbed for the first time in 11 months. Data from the Rating and Valuation Department in late April showed prices of second-hand homes had gone up 1.06 per cent. The increase was broad-based, with all sizes of house seeing a gain.

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 now 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.

“Waning expectations of US interest rate cuts will weaken overall sentiment in the housing market,” Kwok said. “We foresee that residential property transaction will remain active in May, yet lower than that in April.”

He said developers are likely to carry on offering big discounts as they try to shift “a considerable amount of inventory” exacerbated by significant new supply in the pipeline.

“This is beneficial to the housing market,” said Kwok.

One of those offering discounts is Hong Kong developer CSI Properties, which put 104 units at its new Topside Residences project in Kowloon up for sale on Friday evening.

The developer sold 53 of the 104 units it put up for sale on Friday as of9pm.

CSI Properties released the price list for the first batch of flats last week. Ranging from one to three-bedrooms with areas from 269 to 545 square feet, they are priced at HK$4.79 million to HK$11.58 million, or HK$17,818 to HK$21,261 per square foot.

The average price per sq ft after discount is HK$19,388, which is 19 per cent lower than the HK$23,928 per sq ft for the first batch of 50 units at Henderson Land’s Arbour project launched in November 2020 in the same area.

Topside Residences, located in Yau Ma Tei, comprises 259 units in total.

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