Hong Kong’s housing market is showing no sign of slowing, as a throngs of prospective buyers vied to get their hands on the biggest weekend launch of newly built flats this year, before the city’s mortgage payments rise in tandem with higher interest rates.
All 250 apartment units at Wheelock & Co’s Malibu complex at Lohas Park, were sold on Sunday, the second day of the sale, adding to the 500 that were sold on Saturday, according to the company.
Property agents said that the average price per square foot for the Sunday sales were 5 per cent higher, or more than HK$15,000, from the average price transacted on Saturday. The positive momentum seen over the weekend came amid total subscription interests of 27-28 times the initial 320 units first marketed by the developer on March 1.
“The enthusiastic response received for this project is indicative of the strong buying demand in the market for new property launches,” said Sammy Po Siu-ming, chief executive of Midland Realty’s residential division.
He added that Malibu, located near the Lohas Park MTR station, has generated strong interest owing to attractive initial prices quoted by the developer, which were lower compared to those of other recent launches in nearby districts of Tseung Kwan O.
The first 100 units sold on Saturday were snapped up within the first 90 minutes of the launch, the developer’s managing director Ricky Wong Kwong-yiu said.
“The flats are selling fast,” Wong said, adding that six groups of buyers had bought three units each on Saturday, with one single customer forking out about HK$40 million (US$5.1 million) for three properties.
As many as 20 buyers registered for every available unit at the complex during the first day of the sale, with a long queue snaking its way around the block at the sales office, underscoring the strong demand.
“The prices of these large-scale developments by good developers are reasonable,” said a middle-aged buyer who had bought two of the three-bedroom units available as well as a single-bedroom unit, disclosing only his surname, Wong.
“I believe the prices in Hong Kong’s housing market will only keep rising,” Wong said, adding that he was expecting to earn a 3 per cent return on his investment.
The Malibu launch, the biggest this calendar year, would be a bellwether for Hong Kong’s housing market sentiment for the remainder of 2018, said Louis Chan Wing-kit, Asia-Pacific vice-chairman and chief executive of residential sales at Centaline Property Agency.
“Buyers are confident with the housing market” because the recent government budget released in February didn’t contain many measures that dented sentiment, he said.
Hong Kong’s housing market was the world’s least affordable in 2017 for the eighth year running, with the average resident needing to save for 19.4 years without consumption before being able to afford a flat, according to consultancy Demographia.
Still, the city’s new project launches have been selling like hot cakes in an environment of low mortgage rates.
“There is a lot of pent-up demand in the market,” said Raymond Cheng, property analyst at CIMB Securities. “Buyers can generally afford mortgage repayments of HK$20,000 to HK$30,000 a month after they manage to come up with the down payment. Developers sometimes offer secondary mortgages to those who already own a property.”
Supply of new flats in Hong Kong to more than meet demand this year, but concerns remain on the horizon
There are a total of 1,600 units in Wheelock’s Malibu project. Lohas Park is expected to become Hong Kong’s largest residential community with 58,000 residents in 21,500 units when completed in 2025.
Prices for the current batch start at HK$5.36 million after discounts for a 367 sq ft single-bedroom unit, or HK$14,600 per square foot.
The average per-square-foot price of the current batch of 500 flats is HK$14,500 after discounts, the second highest among the eight launches in the Lohas Park area so far.