"Relaxation Measures" Are Limited to Existing Properties; Buyers Turn to the Second-Hand Properties; Tsueng Kwan Had Recorded 56 Transactions in Three Days.
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The Government announced a new Policy Address to propose to relax the limit under mortgage insurance plan last Wednesday, stimulating the transactions in the second-hand property market. On the last Saturday and Sunday, the transaction volumes of the ten leading housing estates recorded by Centaline Property and Midland were 20 and 22 cases respectively, sharply up by 2.3 and 2.6 times per week. The volume of transactions in various districts soared. Tseung Kwan O had recorded 56 second-hand property transactions in just three days until last Saturday, and it exceeded the 50 cases in the first half of October. Some agents point out that, many prospective buyers speed up to enter the market due to the worry of a rise in price in the future, and there were also transactions that owners had risen the prices.
Hong Kong Wen Wei Po Journalist: Ngan Lun-lok
Centaline recorded 20 transactions among ten leading housing estates on the Saturday and Sunday (19th to 20th), sharply rose by 14 cases or 233% from the previous weekend and hit a 27-week new high. The APAC Vice President and Residential Department President of Centaline Property, Chen Wing-kit described the new measures as “relaxation measures”, which make more choices for buyers, leading the second-hand property market to rebound significantly after had been dull for over three months, and buyers who had waited and saw for a long time speed up to enter the market due to the worry of rise in price, especially for small and medium-sized starter homes. However, the two major negative factors in the market have not been resolved, including the Sino-US trade war and local "political incidents", so it is believed property prices will not rise sharply but just slow down the decline, and the market will get into a situation of the price down while transactions up.
The relaxation measures promote the second-hand property market to rebound.
Midland also recorded about 22 transactions among ten blue-chip housing estates, and it is not only a sharp increase of 266% from 6 cases on the previous weekend, but also a new two-and-a-half-year high since the beginning of March 2017. The Chief Executive of the Midland Real Estate Residential Department, Po Siuming points out that, the improvement in the property market reflects the citizens’ acceptance of the relevant policies, and many owners raise prices or close the sales in good view of future market, so it is predicted the units under HKD10 million on sale in the short term will still be popular among the first time buyers and customers who want to change houses.
The President of Ricacorp Properties, Liao Wai-keung says, the new policy of relaxing the property prices upper limit under mortgage insurance plan for the first time housing people is only applicable among the existing properties, but not apply to the mortgage for pre-sale property, making many first-hand property buyers to turn to the second-hand property market, thus stimulating the second-hand property market to rebound.
Metro City had rebounded by 12.5% in prices in more than one month.
Trading in various districts has accelerated markedly. Tam Gwai-ching from Centaline Property expresses, as of October 19, in only three days after the Policy Address was announced, Tsueng Kwan had recorded in the whole district with 56 transactions, higher than 50 cases in the first half of the month. Among them, a middle-rise room G in block 11 of Metro City phase II in Tsueng Kwan, with the area in 363 sq ft, was sold at the price of HKD6.75 million and the sq ft price of HKD18,595. The similar low-rise unit of the same estate was HKD6 million in September, that is, the price had risen by HKD0.75 million or 12.5% after more than one month.
Lee Shing-chi from Midland says, a middle-rise room 05 of Hang Fa Chuen in Chaiwan, with the area in 547 sq ft, was immediately sold by a buyer from other district in only one hour, and the sale price was HKD8.69 million with the sq ft price at HKD15,887. Lam Ka-lun from Many Wells points out that, a middle-rise room G in block 10 of Lynwood Court, Kingswood Villas in Tin Shui Wai was released in mid-August, with a price of HKD6.15 million, and it had been reduced by HKD0.41 million in the early time due to political events, then it was cut by HKD0.07 million to HKD5.68 million and sold after the announcement of the Policy Address. The buyer is from other district and was hurry to enter the market thinking it would be more expensive in the future.
Buyer took the initiative to rise price and purchased a unit in YOHO Town.
There was also transactions with markup. A middle-rise room E in block 7 of YOHO Town in Yuen Long with the area in 423 sq ft had been asked for HKD6.6 million by the original owner at the beginning, attracting three groups of buyers, one group among took the initiative to rise by HKD0.05 million and purchased it at HKD6.65 million, leading the sq ft price to HKD15,721.
Emerald Bay temporarily has received 1100 applications.
As for the first-hand property market, about 40 transactions has been recorded in the past two days, and the trading volume has not increased significantly. The Government’s measures are positive in the second-hand property market. In the face of rising competition, developers are not affected in the sales development. China Evergrande’s Emerald Bay in So Kwun Wat, Tuen Mun just additionally launched the No. 2 price list including 174 units, with an average sq ft price of HKD16,155. Market source points out that, it has received about 1,100 applications, an over-subscription of nearly 2.4 times base on the total of 325 units in the first two batches.
The newly units are from open style to two-bedroom units in 223-383 sq ft, and the discounted prices are HKD3.625-5.988 million after deducting the highest 11% discount and the payment service discount of ad valorem stamp duty (the upper limit is 3% of the transaction price).