The Seacoast Royale apartment complex in Tuen Mun extended its brisk sales for the fourth weekend, as decreasing cases of coronavirus in Hong Kong spurred more homebuyers to venture out of lockdown to take advantage of low borrowing rates amid a flood of liquidity.

Buyers snapped up 29 of the 52 flats, or 55 per cent of the day's offerings by 5:30pm during the weekend sale, according to sales agents. Another 24 flats in the batch are being put up for tender until October 5.

"It is selling well, with a total of 600 units sold out [in the four rounds of the sales]," said Sammy Po, chief executive of the residential division of Midland Realty. "That reflects good real demand."

The successful sale at Seacoast Royale, developed by Empire Group Holdings and Hong Kong Ferry (Holdings), is a sigh of relief for Hong Kong's developers, who are bracing for challenging times as a glut of residential property enters the city's worst economic recession in decades.

Marketed by Henderson Land Developments, Seacoast Royale reported three consecutive sell-out weekends, with as many as 46 people submitting bids for every available unit on August 1, as investors sought to park their money in the world's most expensive property market amid access to easy money that was released by global central bank to combat the economic damage of the coronavirus epidemic.

Hong Kong's easing of social-distancing rules enticed investors back to the weekend property launches, as the daily new infection cases constantly drop in recent weeks. Starting Friday, dine-in services at restaurants have been extended to 9pm from 6pm, cinemas and beauty parlours have been allowed to reopen and wearing a mask for outdoor exercise is not mandatory any more.

Strong response prompted the developers to raise their prices at Seacoast Royale, the biggest being a 17 per cent increase on a studio flat measuring 290 square feet (27 square metres), priced at HK$4.93 million (US$636,637).

The price increase reflected the slight uptick in Hong Kong's home-price index, which rose 0.1 per cent in July, taking the gauge to its highest level in 10 months, according to the Rating and Valuation Department.

While last year's anti-government protests and the outbreak of Covid-19 this year have plunged the economy of the former British colony into a recession, disruption of construction activities has strained supply of new houses and supported prices. Supply of new private residential flats will probably be reduced by between 3,000 and 92,000 unit in the following three to four years, according to the projection by the Transport and Housing Bureau.

Still, the gain slowed from a 2.2 per cent increase in May. Some agents were bearish on the property market because of the persistence of the pandemic. Home prices would probably fall by as much as 1 per cent in July and the decline would widen to more than 2 per cent this month, according to Ricacorp Properties.

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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