Property buyers snap up Great Eagle Holdings' flats in Tai Po even as two simultaneous rallies rattle Hong Kong's nerves

By Lam Ka-sing

/ SCMP |

August 6, 2019 8:05 AM SGT

Hong Kong investors have snapped up the latest launch of small flats, as the first interest rate cut in more than a decade persuaded buyers to set aside concerns of rising political instability, even as protesters held two opposing rallies simultaneously across the city.

Great Eagle Holdings sold 120 flats, or 96 per cent of 124 flats on offer at its Ontolo complex in Pak Shek Kok of Tai Po as at 7pm, according to sales agents.

Ontolo's prices start at HK$5.83 million (US$744,636) for the smallest flat measuring 357 square feet (33 square metres), or HK$16,330 per square foot. The most recent sale in the neighbourhood " Billion Development's launch in May of Centra Horizon " was at HK$14,857 per sq ft after discounts.

"About 80 per cent of the buyers [today] are owner-occupiers who do not care about market sentiment and really have the need for housing," said Kelvin Cheong, Midland Realty's director of New Territories. "This project is also the last one in the area. There will be very few small flats after this round."

GREAT EAGLE HOLDINGS - Models of Ontolo development in Tai Po

Models of Ontolo development in Tai Po. Photo: Tory Ho

The weekend sell-out would be the high point of a bleak week for the property industry, when a five-month price rally in used homes ended with June's price gauge dropping by 0.8 per cent, according to Rating and Valuation Department data. The Centa-City Leading Index compiled by one of the city's biggest property agent networks fell 0.9 per cent in July.

The bull run in the world's most expensive housing market has faltered, as a deteriorating US-China trade war deterred investors, while two months of unprecedented public unrest forced buyers to rethink their decisions. The total value of July's overall transactions, which reflected June's sentiment, plummeted 45.7 per cent on year to HK$54 billion, according to Land Registry data.

Protesters on opposing sides of a controversial extradition bill held rallies simultaneously at two points across Hong Kong on Saturday, disrupting traffic in the commercial city. Their disquiet coincided with data that showed Hong Kong's economy contracting in the second quarter, compared with the first three months of the year.

Also this week, US President Donald Trump sent shock waves through world markets when he tweeted that he would slap a 10 per cent tariff on US$300 billion of Chinese exports.

"The stock market was very volatile with weak investment sentiment," said Ricacorp Properties' research head Derek Chan. "Coupled with the ongoing social movement in the city, a wait-and-see attitude is prevailing among buyers."

The rising economic uncertainty is pushing owners to offload their investments. Veteran investor Cheung Shun-yee sold a parking space at The Center building to Bright Smart Securities' Chairman Peter Yip Mow-lum on June 19 for HK$6.3 million, setting a world record for lots to park vehicles.

Property buyers were also driven to cheaper properties to reduce their financial exposure amid uncertain times.

Louisa Mak, a local actress and Miss Hong Kong pageant winner most famous for her Cambridge University law degree, paid HK$1.91 million for a micro apartment measuring 141 sq ft at the TPlus complex in Tuen Mun. The project, Hong Kong's smallest collection of small homes, criticised by civic groups as offering "inhumane" living conditions, features among its 356 micro apartments 12 flats of 128 sq ft, each smaller than a standard car park space.

DBS Bank has slashed its growth forecast of Hong Kong's 2019 gross domestic product to 0 from 2.5 per cent, citing external shock and political uncertainty that would further restrain local consumption. Exports and retail sales were also down in June, according to figures from Census and Statistics Department.

Lived-in Home Ownership Scheme flats also became more popular, with those that have not had premium paid setting records twice in July. Tung Tao Court in Shau Kei Wan had a flat of 516 sq ft changing hands at HK$7.3 million, or HK$14,147 per sq ft, the highest for such flats in Hong Kong and 2 per cent higher than the earlier record.

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