The volume of second-hand properties in the market has decreased, coupled with uncertain trends in US interest rates and the impact of typhoons, resulting in subdued transactions in the top ten housing estates over the past weekend. Main real estate agencies have shown mixed performances. Centaline and Midland both recorded 7 transactions each, a decrease of 3 transactions from the previous week, with transaction volumes dropping from double digits to single digits; Ricacorp reported 5 transactions, a decrease of 1 transaction from the previous week; while Hong Kong Property saw an increase of 5 transactions.
According to Chen Wing-kit, CEO of the residential department at Centaline Property, some property viewings were postponed or cancelled on Saturday due to typhoons and heavy rain, affecting transactions. Combined with the decrease in second-hand property listings, it has become more challenging for buyers to enter the market. The fluctuating trend of US interest rates has made some buyers more cautious about entering the market, with the recent focus mainly on primary market transactions, putting pressure on secondary market transactions.
Bryan Foo, CEO of the residential department at Midland Realty, noted signs of a softening property market in recent days, mainly due to the delay in interest rate cuts and the presence of new developments offering more units at lower prices. This has compelled existing secondary market property owners to reassess pricing strategies to attract potential buyers. The rising rental prices have also prompted some tenants to transition from renting to buying, with investors gradually acquiring bargain properties for rental income, stabilizing the secondary market transactions. Foo believes that if rental prices continue to rise, it will support overall property market transactions. The influx of talents to Hong Kong bringing labor force and technical expertise has also increased the demand for rented or purchased housing, indicating that the worst times are likely behind us.
Lawrence Liu, CEO of Ricacorp Properties, mentioned the absence of a clear timeline for interest rate cuts in the US, causing the market to believe that high interest rates will persist for some time. Additionally, tightened lending by local banks, slightly weaker stock market performance recently, volatile weather conditions, and competition from new developments have all slowed down secondary market transactions. As for the forecast for the secondary market trend in June, Liu believes that given these factors, as well as the unchanged overall economic environment and retail market conditions in Hong Kong, the secondary market will likely remain subdued for some time before seeing any significant improvement.
Martin Ma, CEO of Hong Kong Property, pointed out that although the Rating and Valuation Department announced a rebound in property prices in April, the numbers are lagging behind. With slower transactions, secondary market property prices have already softened in recent times. However, this has attracted many buyers back to the secondary market for opportunities, especially with no new projects launched this weekend and improving weather conditions, leading to increased property viewings and an upturn in secondary market transactions.
In terms of regional analysis, in the Hong Kong Island region, Chow Hung-wan, Senior Regional Sales Director of Taikoo Shing District at Centaline Property, noted a positive market sentiment recently. Taikoo Shing recorded 1 transaction over the weekend, with a mid-to-low-level unit at Han Court, Unit E, measuring 702 square feet in size, featuring a three-bedroom layout, changing hands for around 9.1 million Hong Kong dollars at a unit price of approximately 12,963 Hong Kong dollars per square foot, with the original owner selling at about 1.237 million Hong Kong dollars in November 2018, incurring a loss of around 3.27 million Hong Kong dollars upon exit.
In the Kowloon region, Feng Kin-ping, Branch Manager of the Third Branch of Meifoo Metro at West Kowloon, Centraline, reported 1 transaction at Meifoo Sun Chuen over the weekend, with Unit C on the mid-levels of Block 7, Prospect Hill, measuring 715 square feet, a three-bedroom layout with a large terrace, priced at around 7.38 million Hong Kong dollars, eventually changing hands for 6.86 million Hong Kong dollars, at a practical unit price of 9,594 Hong Kong dollars per square foot. The new buyer, coming from outside the district, found the unit price reasonable for self-use.
In the New Territories region, Siu Kai-nok, Branch Manager at the Jiahu Hill Branch of Ricacorp Properties in Tuen Mun – Jiahu Hill, reported approximately 2 transactions at Jiahu Hill over the past weekend. One transaction involved Unit E on the mid-levels of Block 9, Lakeville Joy, a 2-bedroom unit with a practical size of around 448 square feet, sold for 4.15 million Hong Kong dollars, equivalent to a unit price of about 9,263 Hong Kong dollars per square foot; the other involved Unit H on the mid-levels of Block 7, Lakeville Meihoo, a 3-bedroom unit with a practical size of around 540 square feet, changing hands for 4.69 million Hong Kong dollars, at a unit price of about 8,685 Hong Kong dollars per square foot.