In the next two months, downward pressure on second-hand properties will intensify.
According to JLL, a worldwide real estate consultancy, Hong Kong's mass residential property prices fell 8.3% year on year in May 2016. Secondary housing prices stabilized in May 2016, according to JLL's Mass Index, which tracks the capital value movement of a basket of mass residential properties in Hong Kong. More purchasers returned to the market seeking for bargains. directory
In April, home sales increased by 2% month over month to 4,586, but remained below the long-term monthly average of 7,656. The overall value of property sales climbed by 18.6% year on year to HKD 40.9 billion.
As developers continue to provide eye-popping financing packages, new project launches in the next months will undoubtedly remain in the spotlight. Sun Hung Kai Properties' Shau Kei Wan project, Manhattan's Homantin project, the Paliburg and Regal Hotels project in Sham Shui Po, China Overseas' One Kai Tak, and HKR International's project in Tuen Mun are among the new developments in the pipeline.
Investor interest in properties with high price tags showed no signs of waning in the luxury residential market. A unit at Severn Villa on The Peak was reportedly sold for HKD 232 million, or HKD 170,463 per sq ft, saleable, setting a new high for the city in terms of unit price. The vendor was able to lock in a profit of 18 times the original purchase price in 2003 thanks to the sales.
According to World Property Journal, JLL's Henry Mok, regional director of Capital Markets, "Large developers with a lot of cash have been adopting aggressive financing methods to get the market's attention recently. Smaller developers, on the other hand, have to resort to offering explicit price reductions to entice buyers. Despite recent pricing stability, new house releases are expected to climb dramatically in July and August. As a result, we anticipate developers pricing their apartments conservatively, putting more downward pressure on secondary market values."
JLL's Head of Residential Leasing and Relocation Services, Stella Abraham, added, "On the back of strong seasonal leasing activity, the fall in residential rentals is likely to have narrowed in recent months. The creation of a two-tiered market is ongoing, with properties offering monthly rents between HKD30,000 and HKD100,000 staying in great demand and demand for property with monthly prices beyond HKD100,000 remaining muted. Meanwhile, rentals in the HKD70,000-100,000 range have stabilized due to a scarcity of stock in that price range."