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Small apartments in Sha Tin set to surpass '97 peak price levels

SMALL flats in Sha Tin are expected to become the first residential units in the city to begin achieving prices that exceed their previous peak levels in 1997, according to property agents.

The likely trend was signalled last week when a 395 square foot flat in City One in the district was sold for HK$1.85 million (RM761,570.51), or HK$4,673 per square foot — 8% higher than the vendor bought it for in the second quarter of 1997, when he paid the previous top price fetched in the district of HK$1.71 million.

Patrick Chow Moon-kit, the head of research at property agency Ricacorp Properties, said following that deal asking prices of about 10 to 20% of the units on offer at City One, Sha Tin Centre and Sha Tin Plaza were now pitched higher than the price level reached in early 1997.

Across the market, property prices climbed to their highest level in March and April in 1997, though prices at the start and end of the year were lower.

"In recent weeks small flats of about 300 sq ft in large-scale housing estates near MTR stations and priced about HK$2 million have become the most popular. Demand from young couples is strong and they are willing to raise their asking prices for the flats," Chow said.

Kenson Ho Ka-kin, a manager at the firm in Sha Tin, said the monthly mortgage expenditure for buying a small flat in City One was about HK$7,000, which was affordable to first-time buyers.

Housing estates in Sha Tin recorded strong sales in recent weeks. Sha Tin Centre, where about 200 to 300 flats were available for sale every month in the first five months of this year, now had only 100 flats for sale.

The limited supply was likely to force home seekers to raise their offers. "The prices of those units will exceed their 1997 market peaks this month," Chow predicted.

The average sale price at City One dropped 10% in May following the government's cooling measures and poor land auction results, Ho said. However, it rebounded 15% last month, he said.

Chow said prices of small units in Sha Tin and flats at Taikoo Shing in Quarry Bay were the closest to their market peaks reached in 1997.

"In the mass residential market, the cheaper and the most expensive housing estates are the most popular and have stronger price growth," Chow said.

People with lower incomes have shifted their preference to properties in the New Territories, from Hong Kong Island and Kowloon.

"Property prices in Kowloon have increased sharply. Prices at Amoy Gardens in Kowloon Bay are about HK$2.3 million to HK$2.4 million currently, which is not competitive with those in the New Territories," Chow said.

"Many home seekers found the flats in Sha Tin attractive as the prices are lower and transport has improved."

Chow forecasts that housing estates in Tai Po will be the next popular target of homebuyers, and thus would also see sharp price increases. — South China Morning Post
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