Hong Kong residential sales volume to reach up to 65,000 units in 2024

Developers are expected to launch primary projects as sentiment improves.

According to a Savills report, the Hong Kong government announced the withdrawal of all property market cooling measures from Feb 28, 2024, with the cancellation of BSD, NRSD and SSD most eye-catching. 

Initial responses were positive, with the first primary project, Belgravia Place, launched after the stamp duty withdrawal, recorded 100% sales rate in the first round, i.e. 138 units sold in 4 hours, with around 20% of buyers being non-permanent residents. 

Here’s more from Savills:

It is expected the withdrawal of cooling measures will stimulate Mainland buyers and talents to speed up their purchases into the local market, with volume likely to rebound by 40% to 50% to reach 60,000 to 65,000 in 2024, with developers likely to be keen to launch their primary projects amidst improved sentiment. 

One of the reasons behind developers’ eagerness to offload their primary holdings is that the mass market segment continues to face an oversupply issue, with approximately 109,000 units available over the next 4 years. With primary transaction hovering 10,000 units per annum in 2022 and 2023, it may take multiple years to absorb such supply.

The bright news for the super luxury segment in Q4 was the sales of the prestige house at 25-26A&B Lugard Road on the Peak for HK$838 million from a local family to a Mainland HNWI. Though far from a distress sales, the average prices of the 11,487-sq ft house (HK$71,700 per sq ft) was still some 30% lower than the original asking price at the peak of the market. 

This deal was a solid proof that there are still genuine, cash-rich Mainland / local buyers looking for top notch housing products (panoramic seaview, exclusive location with high degree of privacy, detached house with large floor plate and ample outdoor spaces), albeit only at the right prices.

Luxury transaction volume elsewhere remained thin with subdued sentiment in the last quarter of 2023, and luxury prices declined by around 1% to 2% in Q4/2023 as a result. It is expected that the cancellation of BSD should lure some Mainland HNWIs to reconsider investing in the local super luxury sector over the next few months, in particular for those who have already got adequate capital in Hong Kong.