Hong Kong residential sales hit 4,137 units in August

NOVO LAND Phase 1B in Tuen Mun was oversubscribed by about 48 times.

According to a Knight Frank report, Hong Kong home prices remained under pressure in August. The overall home price index dropped 1.6% MoM in July, and it has fallen for two consecutive months, according to the Rating and Valuation Department. The price index was the lowest since February 2020. 

Many potential buyers and homeowners were waiting on the side-lines and primary sales supported overall market sentiment. 

In August, Knight Frank said a total of 4,137 transactions were recorded in the residential market, as buyers snapped up new projects, with 1,564 cases recorded, surging 32.9% MoM. NOVO LAND Phase 1B in Tuen Mun, by Sun Hung Kai Properties, was oversubscribed by about 48 times in the third batch of sales of 170 units in the form of price list. 

Here’s more from Knight Frank:

On the leasing front, the mass housing rental market picked up, especially for homes with a monthly rent of HK$30,000 or below. At the same time, driven by an increasing number of Chinese mainland university students returning to the city, leasing activity in districts close to universities was robust. 

In the short term, purchase sentiment is expected to remain weak, and home prices are expected to remain under pressure amid concerns about more interest rate hikes, high levels of new completions and a weakening economy. Nonetheless, with first hand project launches, and various finance schemes offered by developers, much of the purchasing power in the secondary market is expected to shift to the primary market. 

We expect the residential market to pick up gradually once the negative news has been absorbed in the market. With the relaxation of the stress test requirement for mortgages by the Hong Kong Monetary Authority and the quarantine rules on inbound arrivals at Hong Kong, we expect home prices to be less fluctuated in the remainder of 2022.