Hong Kong's property market took a hit from the third wave of coronavirus outbreak, with transactions falling to a four-month low in August.

It was a particularly disastrous month for sellers, with one individual incurring a massive loss of HK$38 million (US$4.9 million) on the sale of a house in Wong Chuk Hang.

Overall transaction volume, including homes, commercial and industrial properties and car parking spaces, sank 34.2 per cent month on month in August to HK$45.59 billion, according to Land Registry data released on Wednesday. It was the lowest since the HK$38.35 billion worth of deals in April.

"The rebound in local coronavirus infections in early July, when the government tightened social distancing measures, dragged housing market sentiment for the worse," said Wong Leung-sing, senior associate director of research at Centaline Property Agency.

Hong Kong's economy has taken a beating from the pandemic and remains mired in a recession. Last month retail sales in the city fell 23.1 per cent year on year for the 18th month in a row.

On Wednesday, the Hong Kong Monetary Authority asked banks extend their loan repayment holidays for small businesses for another six months until April 2021 to help the city's struggling retail, property and service industries amid the lockdowns and consumption slumps caused by the coronavirus pandemic.

With sellers frantically trying to get out of the market last month, they have been incurring huge losses on their transactions. A house measuring 3,408 sq ft at the Marinella in Wong Chuk Hang went for HK$100 million, resulting in a loss of HK$38 million, according to agents.

If the taxes and commission are taken into account, the loss may add up to HK$70 million, they said.

Actor and singer Dicky Cheung Wai-kin sold a 1,466 sq ft flat at Europa Garden in Sheung Shui for HK$10.35 million, making a loss of around HK$1.45 million, agents said, who added that it went for less than the prevailing market price in the area.

Lastly, the owner of a flat in Providence Peak, Tai Po, who had mortgaged it over 16 times since February 2017, made a loss of HK$1.21 million on the sale.

With the pandemic showing signs of easing recently and the government relaxing some of the social distancing measures, buyers could return this month and push secondary market turnover higher, Centaline's Wong said.

He said that the transactions may climb to some 6,000 in September, from 5,390 last month.

Separately, the number of new homes sold in the first eight months of this year plunged 40.6 per cent to 9,217 units, according to Midland Realty.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.

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