Hong Kong residential sales drop 18.8% to 3,148 units in October
Primary sales plummeted 53.2% to just 672 units.
The continued rising interest rates, worsening local economy, and fluctuating stock market have taken its toll on Hong Kong’s residential market. Potential buyers were hesitant to enter the property market, leading to poor performance in both transaction volume and prices.
According to a Knight Frank report, the latest data from the Land Registry showed that a total of 3,148 residential sales were recorded in October, a drop of 18.8% MoM. Primary sales plunged drastically by 53.2% MoM to 672 homes.
Here’s more from Knight Frank:
Overall residential home prices decreased 2.1% MoM in September, according to the Rating and Valuation Department, reaching the lowest level since January 2019. An accumulated drop of 8.1% since January 2022 was recorded. More units were sold below market value in the mass market, given the uncertain market conditions. Developers also reduced the asking prices of new projects to attract buyers.
On a positive note, the luxury market was relatively stable. One notable transaction recorded during the month was a 7,171-sq-ft house at Mont Rouge in Beacon Hill, which was sold for HK$508 million or HK$70,841 per sq ft. The transaction price was the highest of the year for a first-hand villa in Kowloon.
On the leasing front, local moves remained the core driver. The overall home rental index in September rose for the fifth straight month. Significant leasing transactions included a 2,587-sq-ft unit at Ultima in Ho Man Tin, which was leased for HK$188,000 per month. Some tenants took the opportunity in the downward market to upgrade their apartments for the same amount, while some homeowners were willing to offer discounts to tenants.
Potential further interest rate hikes, coupled with weak economic growth, are expected to put pressure on overall home prices in the near term, dampening market sentiment, in particular in the mass market. We forecast a 10% drop in home prices for the mass residential market and flat performance for luxury home prices for fullyear 2022.