2025-09-09 28Hse Editor
Hong Kong’s property auction market offers plenty of affordable options, including repossessed properties, half-share flats, and fractional-share flats. These attract buyers and investors eager to find hidden gems. But what should you know when purchasing half-share or such flats?
Recently, a partial-title unit was successfully sold at auction. The property, a mid-floor Unit C apartment in Mong Kok’s Tak Fung Building, has a saleable area of 395 square feet with a three-bedroom layout. Only half of the ownership was available for auction, with no full title deed provided. The opening bid was HK$1.3 million, and the property sold immediately at the asking price, translating to a discounted HK$3,291 per square foot.
According to property agents, the unit was previously co-owned by two cousins, each holding 50% ownership. The title deed was held by the younger cousin, who had initially refused to rent out the flat or cooperate in selling it, hoping for a developer buyout. When the older cousin decided to sell his share, the younger cousin attempted to purchase it at a low price, sparking a fallout. As a result, the older cousin decided to auction off his half-share of the property to cash out.
When a property is co-owned by multiple individuals, ownership is typically divided into two categories: Joint Tenancy and Tenancy in Common. Half-share and fractional-share flats are byproducts of the latter, where each owner holds a specific share of the property.
Half-share flats refer to properties co-owned by two individuals, each holding 50% of the ownership. Due to circumstances such as divorce, disputes, or financial difficulties, one owner may sell or mortgage their share without the consent of the other, resulting in partial-title flats. Similarly, fractional-share flats involve more than two co-owners. This makes the ownership even more divided and complex.
Properties like half-share flats are generally sold at a discount compared to market prices, but they come with unique challenges. Buyers are required to pay the full price upfront, as sellers cannot provide a complete title deed. Without a title deed for collateral, banks are unwilling to offer mortgages for these properties.
While some finance companies may provide loans, the higher credit risks mean interest rates are often much steeper than those offered by banks, sometimes exceeding 10%. This significantly increases the cost of purchase and does not guarantee loan approval. Prospective buyers must ensure they have sufficient liquidity before considering such properties.
Although these properties may seem like bargains, they come with significant risks and challenges. Buyers need to be prepared for financing difficulties, co-ownership disputes, and potential legal costs. Without a full title deed, financing becomes problematic, and disagreements over property use can escalate. For those willing to navigate these complexities, half-share or fractional-share flats may offer unique opportunities, but careful preparation and legal advice are essential to avoid costly pitfalls.
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