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HONG KONG: Buyers returned to the property market at the weekend after the removal of the cloud of policy uncertainty that was hanging over the market ahead of Chief Executive Donald Tsang Yam-kuen's policy address.
With little or no impact foreseen from the decision announced by Tsang on Oct 13 not to resume building subsidised Home Ownership Scheme (HOS) houses, agents said weekend sales were brisk and looked likely to continue that way.
Benny Ho, senior sales manager at the Tuen Mun branch of estate agency Midland Realty, said a young couple bought a 587 sq ft flat at Richland Garden in the area for HK$1.88 million (RM754,053.16) within 24 hours of viewing it for the first time.
"Their fast decision was prompted by upward pressure on home prices and rentals," said Ho, adding that the government's latest initiatives on housing policy had had no discernible impact on sentiment in the market.
Ho said the couple, aged 30, currently rented a 497 sq ft flat in Tuen Mun for HK$4,300 a month. They chose to move out and buy because the landlord had asked for a 30% rise in monthly rental when the lease came up for renewal in early December, he said.
Based on interest rates in the Hong Kong interbank offered rate (Hibor) market, their monthly instalment on a home loan to buy the flat would be HK$5,500 if they secured a 90% mortgage loan repayable over 30 years, Ho said, which would be less than the proposed new rent on their existing flat.
Interest rates on Hibor-based mortgage plans are usually one-month Hibor plus 0.7 of a percentage point. Currently, that translates into an effective rate on a home loan of as low as 0.95%, based on the one-month Hibor of just 0.25% on Monday.
By comparison, if they renewed their leasing agreement in December, the couple faced a monthly payment of HK$5,590. Similar arguments prompted purchasers to buy in To Kwa Wan and Quarry Bay, agents said.
Eric Wong, sales manager at Hong Kong Property's To Kwa Wan branch, said a purchaser agreed to buy a 1,907 sqft flat at The Latitude for HK$19.07 million four hours after viewing it. "The deal was closed quickly after the owner agreed to a discount," he said, without indicating by how much the seller had dropped his price.
But given that the owner had bought the flat for HK$17.13 million in April last year, the discounted deal still provided a handsome paper profit of HK$1.94 million, Wong said.
Rick Wan, sales manager at Hong Kong Property's Taikoo Shing branch, said homebuyers had returned to the market after no further cooling measures to curb price growth were announced by the government.
"In order to escape possible increases in selling prices, most home seekers did not even want to take the time to negotiate discounts. They just wanted to accelerate the conclusion of their deals," he said.
A buyer decided to snap up a 474 sqft flat at Nan Fung Sun Chuen for HK$3.1 million in two days, he said.
The release of pent-up demand after the policy address saw home sales in the 50 major housing estates monitored by Ricacorp Properties jump 32% from the previous week to 574 deals for the week to October 17.
Home prices rose 0.3% for the week to October 15 from the previous week and were 1.1% higher than the same week last month, according to the Centa-City Index, which tracks prices in the secondary market.
"The sales figure represented an 11-month high," said Patrick Chow, head of research at Ricacorp. Top performer was Hong Kong Island, he said, which saw 120 deals concluded, up 82% from a week earlier.
These included sales of three flats with rooftops in Kornhill. The 1,316 sqft flats sold for HK$11.98 million, or HK$9,100 per square foot.
Alan Chung, senior sales manager at Midland's Sha Tin branch, said home prices in City One rose 3% within a week.
A 395 sqft flat plus rooftop sold for HK$2.34 million or HK$6,000 per square foot. "That was the highest price since 1997," he said. — South China Morning Post
With little or no impact foreseen from the decision announced by Tsang on Oct 13 not to resume building subsidised Home Ownership Scheme (HOS) houses, agents said weekend sales were brisk and looked likely to continue that way.
Benny Ho, senior sales manager at the Tuen Mun branch of estate agency Midland Realty, said a young couple bought a 587 sq ft flat at Richland Garden in the area for HK$1.88 million (RM754,053.16) within 24 hours of viewing it for the first time.
"Their fast decision was prompted by upward pressure on home prices and rentals," said Ho, adding that the government's latest initiatives on housing policy had had no discernible impact on sentiment in the market.
Ho said the couple, aged 30, currently rented a 497 sq ft flat in Tuen Mun for HK$4,300 a month. They chose to move out and buy because the landlord had asked for a 30% rise in monthly rental when the lease came up for renewal in early December, he said.
Based on interest rates in the Hong Kong interbank offered rate (Hibor) market, their monthly instalment on a home loan to buy the flat would be HK$5,500 if they secured a 90% mortgage loan repayable over 30 years, Ho said, which would be less than the proposed new rent on their existing flat.
Interest rates on Hibor-based mortgage plans are usually one-month Hibor plus 0.7 of a percentage point. Currently, that translates into an effective rate on a home loan of as low as 0.95%, based on the one-month Hibor of just 0.25% on Monday.
By comparison, if they renewed their leasing agreement in December, the couple faced a monthly payment of HK$5,590. Similar arguments prompted purchasers to buy in To Kwa Wan and Quarry Bay, agents said.
Eric Wong, sales manager at Hong Kong Property's To Kwa Wan branch, said a purchaser agreed to buy a 1,907 sqft flat at The Latitude for HK$19.07 million four hours after viewing it. "The deal was closed quickly after the owner agreed to a discount," he said, without indicating by how much the seller had dropped his price.
But given that the owner had bought the flat for HK$17.13 million in April last year, the discounted deal still provided a handsome paper profit of HK$1.94 million, Wong said.
Rick Wan, sales manager at Hong Kong Property's Taikoo Shing branch, said homebuyers had returned to the market after no further cooling measures to curb price growth were announced by the government.
"In order to escape possible increases in selling prices, most home seekers did not even want to take the time to negotiate discounts. They just wanted to accelerate the conclusion of their deals," he said.
A buyer decided to snap up a 474 sqft flat at Nan Fung Sun Chuen for HK$3.1 million in two days, he said.
The release of pent-up demand after the policy address saw home sales in the 50 major housing estates monitored by Ricacorp Properties jump 32% from the previous week to 574 deals for the week to October 17.
Home prices rose 0.3% for the week to October 15 from the previous week and were 1.1% higher than the same week last month, according to the Centa-City Index, which tracks prices in the secondary market.
"The sales figure represented an 11-month high," said Patrick Chow, head of research at Ricacorp. Top performer was Hong Kong Island, he said, which saw 120 deals concluded, up 82% from a week earlier.
These included sales of three flats with rooftops in Kornhill. The 1,316 sqft flats sold for HK$11.98 million, or HK$9,100 per square foot.
Alan Chung, senior sales manager at Midland's Sha Tin branch, said home prices in City One rose 3% within a week.
A 395 sqft flat plus rooftop sold for HK$2.34 million or HK$6,000 per square foot. "That was the highest price since 1997," he said. — South China Morning Post
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