Small, medium flats to see 15% price growth in 2015

December 17, 2014 17:16
Alva To (inset) expects a 15 percent spike in prices of small and medium-sized apartments. Photo: HKEJ

Small and medium-sized flats in Hong Kong will see a further 15 percent increase in prices next year amid robust demand, according to property service provider DTZ.

However, prices will begin to stabilize in the second half, it said.

Residential transactions rebounded in the second half this year, up 60 percent to 37,000 deals from a year earlier.

The figure compares with 27,000 deals in the first six months.

Incremental easing of property measures in May unleashed end-user demand, according to Alva To, DTZ North Asia head of consulting.

New and smaller units attracted first-time buyers after developers offered discounts to mitigate the impact of tightening measures such as double stamp duty.

“We are very bullish about the residential property market in 2015 given robust self-occupation demand," To said.

"High-end flats and medium-sized flats may see a further price increase of 10 percent and 10-15 percent, respectively.”

Midland Holdings, one of the largest real estate brokers in Hong Kong, is less upbeat.

Property prices may rise another 2-5 percent in the first half but the trend will reverse in the second half due to increased supply and expectations of an interest rate hike in the United States, Midland director Sammy Po said.

Supply of new flats, mostly small and medium-sized units, is expected to reach 30,000 next year and new home transactions may hit an 11-year high of 18,000, he said.

Second-hand home sales may grow 10 percent to 54,000.

Buying sentiment has been strong in the New Territories, with Festival City in Tai Wai reporting an HK$11.8 million deal for a lower-floor flat with a saleable area of 715 square feet.

The transaction translates to a unit price of HK$16,500 per sq. ft., a new record for similar flats in the area.

A two-bedroom flat with a saleable area of 483 sq. ft. in Siu Hong Court, a Home Ownership Scheme estate in Tuen Mun, was recently sold for a reported HK$3.5 million.

The price is close to that of a three-bedroom flat in the same area.

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