Hong Kong home sales surged to a six-month high in November on the back of an easing in mortgage lending policy and developers' aggressive marketing of new projects, but market watchers say sales are unlikely to be sustained this month.
Overall residential transactions surged 43.9 per cent month on month in November to 5,756, while value jumped 17.4 per cent to HK$47.78 billion (US$6.1 billion), according to figures from Land Registry on Tuesday. The number of transactions was also the highest since 8,208 deals were recorded in May. It was also the second consecutive month of rising deals.
Including homes, shops, industrial and office units, overall deals jumped 32 per cent month on month to 6,701 in November.
"Sales of new homes saw significant growth [as they] benefited from the relaxation in mortgage requirements and interest-rate cut, which prompted developers to actively launch new projects," said Derek Chan, head of research at Ricacorp Properties.
Clashes break out between riot police and students protesting as they exchange tear gas and petrol bombs at the Chinese University of Hong Kong in Sha Tin, on November 12. Photo: Sam Tsang alt=Clashes break out between riot police and students protesting as they exchange tear gas and petrol bombs at the Chinese University of Hong Kong in Sha Tin, on November 12. Photo: Sam Tsang
He said that the number of new homes sold surged 54 per cent month on month in November to 2,091 as developers cut prices and offered discounts to attract buyers, while sales of used homes rose 39 per cent to 3,364 amid lower asking prices.
Market observers said that because of the time lag between buying and registering a property with the government, which is typically about four weeks, the November transaction figures better reflect the state of market in October.
But Chan expects transactions in December to sink more than 40 per cent month on month to just 3,850, the lowest this year, as sentiment had been dampened by heightened violence in the first two weeks of November.
The sentiment was echoed by Louis Chan, Asia-Pacific vice-chairman at Centaline Property Agency, who said that flat viewings were affected because of disruption to the transport network for days on end.
"Sales of new projects were also suspended as were the launch of show flats, leading to downbeat buying sentiment," said Centaline's Chan.
Meanwhile, property prices continue to trend lower as seen from the sale of a flat in Yoo Residence, in Causeway Bay. Last week, a 464 square feet unit sold for HK$15 million, 37 per cent lower than the original price of HK$23.88 million.
The commercial property market also remained mired in the doldrums last month. Although only five deals were recorded at the 50 grade A office buildings tracked by Midland IC&I, it was better than the one deal seen in August.
"The local political upheaval worsened last month, so local normal commercial activities ground to a halt for days, including real estate transactions and leasing activities," said Eric Ong, chief operating officer at Midland IC&I. "Quite a number of owners and investors are already planning to travel [in December] and as pessimism still prevails on the market, turnover can hardly be expected to rise."
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 © 2019 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
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