HK's mass residential market seen picking up

HK's mass residential market seen picking up

Buyers encouraged by govt Budget, mortgage price war, say property agents

By JANE MOIR
IN HONG KONG

A STRING of recent property sales in Hong Kong's mass residential market has triggered speculation of a more brisk outlook for the sector, which continues to lag the luxury sector on a grand scale.

Sturdy sales: Nearly 500 flats were reportedly sold this weekend alone across Hong Kong

Despite strong economic growth last year, the mass residential property market dropped 2.7 per cent in 2006. In contrast, the luxury sector has soared by more than 70 per cent since the Sars crisis of 2003.

Sales of cheaper flats over the past week have grabbed the headlines, with some buyers having to queue for hours to sign up for the latest residential offerings.

Hong Kong is also experiencing a mortgage price war, but the mass market has been relatively immune up to now.

Nearly 500 flats were reportedly sold this weekend alone across Hong Kong, including Henderson Land's 119-unit project in Yuen Long, The Verdancy. The flats sold for around HK$2,300 (S$447) per square foot.

Sun Hung Kai Properties also sold more than 200 of its Manhattan Hill units in Lai Chi Kok at HK$5,500 to HK$6,000 psf. A further 80 units of Pacific Century Premium Developments' Bel Air residential project at Cyberport were sold, just days after being released.

Property agents said a mixture of the feel-good factor from this year's Budget and a mortgage war in the city had encouraged buyers.

Despite sturdier sales in recent weeks, some analysts remain cautious, suggesting that developers may be using various tactics to talk up the market as buyers remain wary of high prices being sought in the mass residential sector.

Andy So, research analyst at Core Pacific Yamaichi, noted, however, that much will depend on the sales tactics employed by developers. 'Is it (the buying surge) simply because of the fact that some developers chose to launch fairly aggressive sales over the weekend?' he said.

He believes the mass sector will post fairly moderate growth this year of a few percentage points. The primary reason for sluggish growth, he stressed, is the high price being sought. 'Demand at the current price level shouldn't be very strong - the asking price by the developers is too high,' he said.

Property experts expect an increase of up to 20 per cent in luxury residential sales this year as demand for up-market homes continues to soar amid limited supply, but the mass sector is continuing to lag as buyers steer clear of steep price tags.

However, property firms such as Savills believe there may be a chance of the mass sector picking up this year if developers price the units slightly lower. Savills also points to the number of sale and purchase agreements for residential units in January, which reached 7,500, a year-on-year increase of 53 per cent.