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Hong Kong Property Market - Yr.2019 Oct: Average price per sq feet $11087 1.03%   (last month:$10974)
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Ready to go! 8235 Units of Many New Projects Will Be Launched This Quarter.

Image Caption
2019-10-04-(Fri)
【28Hse.com】  
The supply is lean to be increased according to the policy address. Developers continue to launch at market prices.

Hong Kong Wen Wei Po (By Ngan LunLok)

In order to alleviate social conflicts, the industry expects to announce "Policy Address" at the end of the month, emphasizing on the supply of land and housing, and it is estimated would speed up developers’ project launching, leading the whole newly properties that possible to be launched in the fourth quarter to up to 8,235 units, which is equivalent to 52% of about 15,663 units in the first three quarters. Developers are expected to continue to launch the projects at market price due to the stagnation of the political and economic environment, and the second-hand property prices will be under pressure. The trend of property prices in the fourth quarter depends on the development of trade wars, and it is expected to fall another 3% to 5% if the situation continues while to stable if the situation is improved.

Property prices fell from high levels due to the poor market sentiment being affected by trade wars, economic downturns and continued violent demonstrations. The Chief Executive of the Midland Real Estate Residential Department, Po Siu-ming believes, Hong Kong is still surrounded by worries and there are no signs in the property market outlook of the fourth quarter that trade wars and political events will be completely resolved, so the impacts to economy and people's livelihood will gradually emerge. Although the recent second-hand property transactions have rebounded, but if the situation can continue or not depends on the development of the market conditions and the housing policy in the policy address that will be released this month. He points out that housing and land issues are always challenges to all previous Chief Governors, so it is expected that the new policy address will focus on increasing the supply of future housing, especially land recycling.

The property price may fall 5% if the chaos continues.

He points out that, it is unclear whether the relevant measures can alleviate the long-term shortage of housing supply, but the announcement of the new measures may alleviate the market's worries about the shortage of private properties and alleviate the developers' concerns about the supply in the future market, helping to increase the first-hand property supply in short-term. The market expects the increase in housing supply, and the developers continue to launch projects at market prices, so the second-hand property prices will be suppressed if the premium for the first and second hand properties continues to narrow.

He predicts the property market trend in the fourth quarter will depend on the development of the trade war and social turmoil, and the property price is expected to fall another 3% to 5% if the situation continues while to stable if the situation is improved.

The company predicts there would be new projects involving about 8,235 units in the fourth quarter, and this number is equivalent to 52% of that in the first three quarters. Among the supply in the fourth quarter, Tseung Kwan O and the Sai Kung Districts have the most in about 1,933 units, then Ho Man Tin, Kowloon Tong and Kai Tak districts have 1,642 units, and Sham Shui Po and Tai Kok Tsui districts account for 1,472 units, besides Yuen Long and Tin Shui Wai districts supply 1,241 units, while Tuen Mun district has 795 units.

The Lead Analyst of this company, Lau Ka-fai points out that, the current negative factors in the property market have risen and overshadowed the positive factors, causing property transactions to fall. However, compared the property market adjustment period in this year with that of last year, although this year's market adjustment period has the negative factor of local social events, but the property price down range in this year is less than that of last year also the second-hand property transactions are more than that in last year, in speaking the housing market. Taking property prices as an example, property prices fell from high level in August last year, with down range up to 8.7% in the following four months, while property prices started to fall from high level in May this year, with down range less than 5% until now in nearly four months; About second-hand property trading, there had been about 8,540 cases in the four months since last August, while there had been up to about 11,700 cases in the first four months since the start of the adjustment period this year, so the second-hand property transaction number in the adjustment period of this year is higher about 37% than that of last year.

"Quantity first then price”; Nearly 1,400 first-hand property units were sold in the last month.

Another thing to note is that, along with the property prices falling, developers are expected to seek sale quantity first than price, and continue to launch new projects at market prices, and the premium between the first-hand and second-hand properties had been narrowed from 6.6% in the second quarter to 3.3% in the third quarter, a new low in three quarters, also it is the main reasons for maintaining a certain level of sales in the third quarter.

According to the information on the first-hand residential property sales information network, the first-hand property sales in the third quarter of this year still reached a level of about 4,048 units, although it was about 33% lower than the 6,036 units in the second quarter but still slightly higher than the average in 2018 of 3,926 units. In September alone, nearly 1,400 first-hand property units were sold, and it rose after a three-month falling, reflecting the launching at market price takes effect.
Translated by 28Hse.com . All right reserved.