“The second-hand home market is facing a lot of competition from the first-hand market, so prices have not had much room to grow,” said Kathy Lee, head of research at Colliers Hong Kong. “Developers are pricing their new launches fairly close to the [second-hand] market.”
Since the cooling measures ended, developers have been launching their unsold stock to take advantage of improving market sentiment. As of April, 4,800 new units had been made available to buyers so far this year, a seven-year high for the first four months and more than half of what they put on offer in all of 2023, according to data from Midland Realty.
Among the projects launched in April was the first batch of flats at the Onmantin residential project by Great Eagle Holdings in Ho Man Tin, which was priced from HK$17,759 (US$2,274) to HK$25,866 per square foot. The cheapest unit, measuring 388 sq ft, had a price tag of HK$6.89 million. All 260 available flats found buyers on the first day of the launch on April 27.
The price range was more than 25 per cent cheaper than the nearby In One Above residential project, which was launched by Chinachem Group in May last year.
The prices at Onmantin were also the lowest for the neighbourhood since 2016, when Kerry Properties launched its Mantin Heights development at an average of HK$19,000 per square foot.
In April, property deals in Hong Kong, including new and lived-in homes, car parks, office units, shops and industrial places, hit a near three-year high with 9,880 units changing hands, according to official data.
Sales of new and second-hand homes shot up by 115 per cent to 8,551 units compared with March, Land Registry data showed.
“Just about three months after the removal of market curbs, more than 7,000 new residential units have been sold, about 67 per cent of last year’s total sales,” said Eddie Kwok, executive director of valuation and advisory services at CBRE Hong Kong.
“Nevertheless, the market needs to take a breath before several new projects in the pipeline debut. If developers resume their strategy of prioritising transaction volume over price, monthly transaction volume may rebound in the second half of 2024.”
May’s slowdown in property deals could also be attributed to waning hopes for an imminent interest-rate cut, Colliers’ Lee said. The US Federal Reserve is unlikely to initiate any policy easing with inflation in the world’s largest economy remaining above its 2 per cent target.
The Hong Kong Monetary Authority adjusts its policy based on the Fed’s decisions in order to keep the local currency’s peg to the US dollar.
Lee added that Colliers is standing pat on its forecast for the year, which has home prices remaining stable or declining by up to 5 per cent.
The recent surge in the bellwether Hang Seng Index (HSI), meanwhile, could boost the property market’s prospects in the coming months, CBRE’s Kwok said.
“Usually, the HSI is highly correlated with residential prices, but with a two- to three-month time lag,” he said. “If the HSI remains at its current level or continues to improve, we expect prices for the secondary market to stabilise.”
