Transactions in the secondary housing market have fallen sharply in Hong Kong, with some real-estate agents describing the current conditions in the segment as the worst in 20 years, Apple Daily reported.
Sales of second-hand homes suffered as developers such as Sun Hung Kai, Henderson Land and Cheung Kong have stepped up roll-out of new flats, at prices — in some cases — even lower than those of pre-owned flats on the market, the report said.
While new flats usually come with many preferential offers, what is most appealing to prospective buyers is the fact that the units can be mortgaged up to 95 percent of the price.
Meanwhile, another reason the second-hand market is moving slowly is that most owners are unwilling to slash prices by more than five percent as they are usually in no hurry or under financial pressure to sell, given the low-interest environment.
According to Apple Daily, there were only 41 transactions at the top ten residential projects during September 1-13. That marks a 30 percent decline from the 61 deals recorded during the same period last month.
Whampoa Garden, which has over 10,441 households, has had no flats changing hands over the last 15 days.
Wang Wai-keung, an agent with Sunrise Property, said it was something he had never witnessed at the residential project, which has seen average apartment price soar 160 percent over the last seven years to over HK$14,000 per square foot now. A 380-square-foot flat now has an asking price of nearly HK$6 million.
Tai Koo Shing has seen only two flats change hands since the beginning of September, a 75 percent drop compared to the same period last month.
Nan Fung Sun Chuen, an entry-level residential complex in Quarry Bay, is believed to have had no transactions for 29 days straight, the longest such no-sales period in its history.
Jacinto Tong Man-leung, chief executive of Gale Well Group, said the deadlock in the market has come about as home prices hit new highs in recent years, making owners reluctant to settle for lower offers.
Development Secretary Paul Chan Mo-po wrote on his blog Sunday that prospective home buyers should be extra cautious. People should assess the risks carefully, as there will be abundance in home supply — amounting to some 83,000 units in the coming three to four years, Chan said.
About 70 percent of the homes that will come on to the market will be smaller size units, he said.
There will be 20,000 residential units being built in 2016 alone, according to Chan.
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