2024-04-29 28Hse Editor
First half of the year sees 1,967 cases – 25% being special units – losing money
In the aftermath of US interest rate hikes, the Hong Kong property market is reeling. According to Land Registry data, there were 1,967 resale cases in the property market that recorded a loss (that is, the selling price was lower than the buying price) in the first half of the year, accounting for 14.6% of transactions that took place during the period – a 14-year high since the second half of 2009. A special penthouse unit at High Place in Kowloon City, which was occupied for nearly ten years, was recently sold for about HK$13.5 million, marking a loss of HK$4.55 million yuan or 25% compared with its purchase price in 2018. This was the largest loss in the development’s history. Meanwhile, construction price has hit a record low for at least three years. Lai Tsz-tin
The largest unit in High Place, the penthouse unit measured 700 square feet in size, and offered three bedrooms and a 221-square feet rooftop. The unit was put up for sale in September of 2021 for HK$19.5 million, and the price was reduced in May last year to HK$18 million. However, it was not until the the price was further reduced to HK$16 million that buyers began negotiation, and was eventually sold for HK$13.5 million, at HK$19,286 per square foot. Taking into account stamp duty and commission expenses at the time of purchase, the actual loss is expected to be as high as HK$5.36 million.
Short holding period, low profitability ratio
Chan Hoi-chiu, Head of Property Research at Ricacorp, said that although home prices and transactions rose in the first half of the year after customs clearance, more owners with a shorter holding period left the market at a loss when selling their flats. Therefore, the resale profit ratio and the average profit margin of second-hand private residential properties have continued to remain low, although the decline has improved from that of the second half of last year.
According to the Land Registry, a total of 1,967 resale cases recorded losses in the first half of the year, accounting for 14.6 per cent of total transactions during the period, hitting a 13-year low since the introduction of property cooling measures in the second half of 2010.
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