Hong Kong residential transactions up 5.9% in August

There were over 3,200 transactions in total.

According to a recent report from Knight Frank, the residential market eased for the third consecutive month in terms of both prices and sales volume. Overall residential prices fell by 1.1% MoM in July, following a revised 1.1% decline in June, according to the Rating and Valuation Department (RVD). 

“There was a modest gain in the number of residential transactions in August, with 3,247 transactions in total, up 5.9% MoM, according to the Land Registry, with primary sales falling by 8.4% MoM and secondary sales rebounding by 11.1% MoM,” the report said.

Here’s more from Knight Frank: 

Home-buying sentiment remained weak, given rising Hibor-based mortgage rates and abundant supply. Homebuyers were more conservative amid the prevailing economic conditions unless offered steep discounts. CK Asset recently launched its Coast Line II development in Yau Tong at an average price of HK$14,997 per sq ft of saleable area, which was claimed to be the selling price seven years ago. 

The project received a total of 38,000 tickets, surpassing the previous record set by New World Development’s The Pavilla Farm in Tai Wai in 2021, with 30,592 tickets. All 626 units rolled out on the first day were sold. 

The rental leasing market remained buoyant, with overall residential rentals rising by 1.0% MoM in July, contributing to a 4.4% YTD gain. Class B units (with a saleable area of 40 sqm to 69.9 sqm) outperformed the market with a 1.4% MoM increase, according to the RVD. 

We note high demand from Chinese mainlanders entering the city through various schemes, typically for one- to two-bedroom apartments in proximity to MTR stations, with rents from HK$15,000 to HK$35,000 per month. 

Some big-ticket sales were recorded in the luxury segment despite the sluggish market. During the month, a 4,440-sq-ft superior duplex apartment unit in Dukes Place in Jardine’s Lookout was sold for HK$320 million (or HK$72,072 per sq ft). 

Another 3,857- sq-ft house in Strawberry Hill at The Peak was sold for HK$251 million (or HK$65,076 per sq ft). Notable leasing transactions were also recorded during the month, including a 2,939-sq-ft house in Mont Rouge in Beacon Hill, which was leased for HK$260,000 per month (or HK$88 per sq ft). 

Meanwhile, developers remained cautious in acquiring land. A consortium led by Sino Land has recently won a land tender for a Kai Tak residential site for HK$5.3 billion, or HK$5,392 per sq ft, representing a nine-year low for a government land premium at the site of the former international airport. 

Last month, the tender for a residential site in Tsuen Wan was scrapped after a single bid from local developer Grand Ming Group fell short of the government’s undisclosed reserve price. The failed government land sales and the soft land prices indicated cautious sentiment among developers amid heightened risks.

As developers are poised to launch discounted primary units in the coming months to unload sizable inventory, the primary market is expected to dominate market sentiment, exerting further pressure on property prices in the secondary market for the rest of the year.