Hong Kong Apartments Rising Prices Fuel Sales

Posted on 03 June, 2021 | By Property852

The sales value of Hong Kong apartments hit a two-year high in the past month, fueled by bullish investors. The surge was propelled by sales of luxury Hong Kong apartments and rising home prices.

Transaction values, overall, soared 2.9 percent month-over-month, rising to HK$87.6 billion (U.S.$11.3 billion) during May, according to Land Registry statistics on Wednesday. This increase was the biggest gain since May of 2019, when turnover was at HK$90.32 billion.

On the other hand, overall transactions, which include shops, homes, office and industrial units, fell 2% month-over-month to a May level of 8,965, according to government data.

This data suggests growing demand for luxury properties, since homes worth over HK$10 million displayed substantial increases last month, according to Derek Chan, a research executive at Ricacorp Properties. According to Chan, the trend is expected to continue during this month.

Amidst the growing optimism regarding Hong Kong's strong economic recovery, as well as better control over the pandemic within the city, investors are more frequently choosing property as a place to park capital. After six straight quarters of pandemic-related economic decline, Hong Kong posted 7.8% growth during the first quarter, which was its best performance in 11 years. Furthermore, unemployment declined to 6.4% during April from a February level of 7.2%.

Chan noted the successful launches of new projects, the majority of which had already been sold out in the last month. He pointed out that almost 300 of the 380 units were sold at the South Land project, located near the Wong Chick Hang MTR station. The average price of the units sold was more than HK$20 million. Moreover, the transactions for lived-in homes priced at over HK$10 million rose to 1,064 sales, the highest total sales in two years.

Hong Kong Apartments for Rent

The prices of lived in Hong Kong apartments also continued gains for the fourth consecutive month as of April, growing to the highest level seen since July 2019, according to Rating and Valuation Department data reported last week. The new data is within approximately 1.5 percent of the historic high of May 2019, prior the the start of anti-government protesting.

As many potential investors are accelerating buying decisions due to fear of home prices increasing further, sales of new homes climbed 47.8 % month-over-month during May to 1.558, with their value rising to HK$26.9 billion, the highest since HK$32.6 billion, which was recorded in May of 2019, according to Centaline Property Agency.

Besides luxury Hong Kong apartments it transpires that many investors also channeled capital toward car parking spaces. They took advantage of the November discontinuance of the additional stamp duty that had been imposed on transactions by non-residents.

Chan noted that car parking bay sales soared 18% month-over-month for May. According to Centaline, the optimistic property market mood could push transactions in the first half to a record high of HK$395 billion, overtaking the prior record of HK$388.8 billion which was set back in the first half of 1997.

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