Land, condo sales plummet in Hong Kong Land, condo sales plummet in Hong Kong
Share this on WhatsAppA prolonged climate of uncertainty in Hong Kong is now compelling local developers to adopt increasingly conservative strategies. This has led to... Land, condo sales plummet in Hong Kong

A prolonged climate of uncertainty in Hong Kong is now compelling local developers to adopt increasingly conservative strategies. This has led to a marked slowdown in bids for government land sales and a fall in prices for unsold properties.

Global property consultant JLL said the dim outlook held by developers is reflected in the land sales results, where five of the recent winning bids came in at below the lower end of market expectations.

“Based on our analysis of government land sales results, residential land prices in select districts have fallen by as much as 20 per cent over the past 12 months. With interest from mainland developers also starting to cool in the second quarter, this trend is likely to continue over the short-term,” the firm said.

Also, home sales reached their lowest levels on record in the first quarter before recovering slightly in the second quarter. Still, average monthly sales volumes in the first half fell 38.3 per cent year-on-year to 3,320, compared with the monthly average of 5,377 recorded in the corresponding period in 2015.

International property website worldpropertyjournal.com reported that home sales from January to March were lower than the previous market lows posted during the SARS outbreak, when monthly transactions fell to as low as 4,130 in May, 2003.

In the secondary market, capital values of mass residential properties trended down 6.4 per cent in the first half as volatility in the local stock market and the prospect of further interest rate hikes led to more homeowners willingly lowering prices.

Also, capital values of luxury residential properties, which had been faring better, are now starting to soften by 1.9 per cent in the first half.

“The residential leasing market will turn increasingly tenant-favourable against a surge in rental supply and creeping vacancy at the top-end of the market. The leasing environment will continue to face challenges against dim hiring intentions and a gloomy economic outlook. As a result, we expect rents will drop 5 per cent to 10 per cent this year,” said JLL’s head of capital markets and managing director Joseph Tsang.

 

 

 

 

 

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