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Sellers have begun cutting their asking prices for Hong Kong properties in response to growing uncertainty over the global economic outlook. This creates new opportunities for buyers who until now have been priced out of home ownership.
Across the board, sellers have begun offering discounts on their asking prices of between HK$100,000 (RM38,078) and HK$1 million as they bid to secure quick sales, agents say. Prospective buyers who previously found home ownership beyond their reach are being lured back into the market by the wave of discounting, they say.
But while sellers finally succumbed to market forces and were far more willing to negotiate, there was no evidence of widespread panic in the market, they add.
In Mei Foo Sun Chuen, the owner of an 890 sq ft flat cut his asking price of HK$5.45 million by HK$300,000 in response to the turmoil in the global financial markets, says David Yau, senior district sales manager at Midland Realty’s Mei Foo Sun Chuen office.
“The vendor revised his asking price after a month of failing to attract bids,” says Yau. Another flat of a similar size on a lower floor was offered at HK$4.7 million, down from HK$5 million previously.
“It is becoming more difficult to conclude deals as prospective buyers hope to hammer down prices more and some vendors prefer to offer their flats for rent instead of dumping them at a big price cut,” he says.
Tody Yeung, a senior consultant at the Tseung Kwan O branch of estate agency Ricacorp Properties, says adverse market sentiment prompted some owners to cut asking prices by 4% to 8%. A 765 sq ft flat at La Cite Noble was offered at HK$4.3 million, he says, down from its original price of HK$4.5 million. “There is now more choice for prospective buyers as an increasing number of units are being offered at lower prices compared to last month,” he says.
The discounting under way in the market have taken prices at The Metro City to below HK$3 million.
In Tin Shui Wai, a vendor reduced the asking price of his 579 sq ft flat at Chestwood Court, in the third phase of the Kingswood Villas development, by 6%, or HK$100,000, to HK$1.7 million. “About 40% of owners in Tin Shui Wai are now cutting prices, with some offering discounts of up to 10%,” says Man Ka-fai, sales manager at Ricacorp Properties’ Central Park Towers branch in Tin Shui Wai.
Prospective buyers with deep pockets looking at pricier flats could bargain for even bigger discounts since these transactions involved larger lump sums, say agents.
A 3,257 sq ft flat at Residence Bel-Air in Pok Fu Lam sold for HK$61 million recently, down 14% from its original asking price and 4% below previous transaction prices for flats of a similar size in the estate.
“Low borrowing costs will help owners hold out. But whether they will be prompted to cut their prices further will depend on the performance of the stock markets in the coming weeks,” says Emily Ha of Hong Kong Property. She says the prospect of rising inflation could prompt some owners to lease rather than sell. — SCMP
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 873, Aug 29-Sep 4, 2011
