Hong Kong residential transaction volumes up 15% to 5,024 units in September

But the economic recession and mounting market uncertainty continued to weigh on housing prices.

With the COVID-19 outbreak easing and some of the social-distancing restrictions lifted, purchase sentiment in the residential market improved. Knight Frank reveals the sales market became more active in September, with transaction volume increasing by 15% MoM to 5,024 units.

The primary market, in particular, was under the spotlight, given a number of new project launches, including CK Asset’s Sea to Sky in Lohas Park, Sun Hung Kai Properties’ Wetland Seasons Park in Tin Shui Wai, and ITC Properties and URA’s Hyde Park in Cheung Sha Wan.

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Most recently, the first two batches of flats at New World Development and MTR’s The Pavilia Farm in Tai Wai was heavily oversubscribed by 57 times, the highest subscription rate since 1997.

However, the economic recession and mounting market uncertainty continued to weigh on housing prices. According to the latest official statistics, overall residential prices dropped by 1.1% MoM in August. This was the largest decline since February, resulting in a price gain of only 0.4% so far this year.

In the luxury market, some homebuyers successfully leveraged the price correction amid a more volatile market to get on the property ladder, most targeting apartments priced at HK$20–30 million.

The leasing market regained momentum during the month. Flats that were put on the market were leased out quickly since landlords were willing to negotiate. There were more enquiries from expatriates who plan to come to Hong Kong early next year. Serviced apartments offered deeper discounts, as they faced competition from hotels offering long-stay promotion packages and other attractive offers.

Looking ahead, the primary sales market is expected to remain active with a few new projects scheduled for launch in the fourth quarter. Developers may provide more incentives and discounts to speed up sales before the year end. With more units available for sale and protracted negative market factors, we expect housing prices to drop by 3–5% in the rest of 2020.