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Hong Kong property
Business
Victoria Allan
Victoria Allan

Concrete Analysis | Hong Kong’s housing market is slowing but surely on the path to recovery

  • Sentiment around the property market has improved and sales have trended up
  • There are a lot of Hongkongers, local and expat, sitting on cash and looking for somewhere to put it

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The resurgence in Covid-19 infections in the summer, as well as the implementation of the national security law created a flight of capital. But, as is usually the case, Hong Kong ‘will adjust, reset and move on’. Photo: AFP
Victoria Allan

In early September, on the Friday after the government relaxed Covid-19 measures that restricted on-site dining, it was nigh on impossible to find a table at your favourite restaurant (capacity limits remained). In all corners of Hong Kong, six weeks of stagnation had led to an outburst of pent up demand – for everything. People wanted out.

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Similarly, with infection numbers averaging in the (mostly) single digits this month, and business getting back to something resembling “as usual”, sentiment revolving around the property market has also improved, and in another display of pent up demand, sales have trended up. In September, sales clocked in at 6,581, surpassing August’s total of 5,390, according to Land Registry data.

But research by JLL seemed to fly in the face of that good news. JLL stated luxury property sales in the first half of 2020 plunged 17 per cent over the same period in 2019, although capital values ticked up by 0.4 per cent in the second quarter.

That’s not a real surprise, nor does it paint a complete picture of what the residential market looks like right now. Mass residential is indeed experiencing a renaissance. Despite Covid-19 led weak sentiment in August and a 1 per cent drop in mass values, Empire Group and Hong Kong Ferry’s Seacoast Royale in Tuen Mun sold all 185 units on launch day. Furthermore, the first batch of sales for New World Development’s The Pavilia Farm in Tai Wai this past weekend were oversubscribed 21 times.
The luxury market is behaving as it always does – the typically resilient sector is stable if you take prices into consideration. August saw a St George’s Mansions’ unit in Ho Man Tin sell for HK$115 million (US$14.8 million), nearly HK$54,000 per square foot.
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St George’s aside, inactivity in the secondary luxury market was more pronounced in the HK$50 million to HK$150 million neighbourhood, simply because of the inability to physically see a property. The July/August lockdown effectively halted viewings, and as innovative as virtual tours may be, they’re no match for the real thing. Add to that, owners with strong holding power and prospective buyers who are waiting to pounce on distressed properties are going to keep waiting.

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