Advertisement
Hong Kong property
Business

Is Hong Kong’s property market turning? Buyers walk away from 21 signed contracts, forfeiting US$1.1 million in deposits amid rising rates

  • A total of 21 buyers of the project in Cheung Sha Wan failed to complete transactions they agreed to in 2020, says Twin City Holdings
  • The number of terminations in one day is among the highest in memory and may be a sign of more to come in a soft market, one agent says

Reading Time:3 minutes
Why you can trust SCMP
6
A view of The Vertex in Cheung Sha Wan, taken in October 2021. Photo: SCMP/ K. Y. Cheng
Sandy Li

The developer of The Vertex, a housing development in Hong Kong’s Cheung Sha Wan district, terminated 21 flat purchases on Tuesday as the would-be buyers failed to complete their transactions, forfeiting a total of HK$8.83 million (US$1.1 million) in deposits.

Advertisement
The number of terminated deals in a single day was among the highest in memory, and the Hong Kong housing market may see more abandoned purchases given an outlook that calls for falling prices amid rising mortgage rates, a broker said.

Developer Twin City Holdings, a wholly owned subsidiary of VMS Group, said it notified the 21 buyers about the termination of the transactions and the forfeit of their 5 per cent deposits on Tuesday.

The Vertex went on sale in 2019. The 21 buyers had agreed between April and December of 2020 to buy units ranging in size from 224 square feet to 517 sq ft for between HK$5.6 million and HK$12.1 million, according to government records.

The developer terminated the deals because the buyers “could not be contacted or did not apply for the developer’s mortgage scheme, or indicated that their intention was to not complete the transaction,” according to the developer’s statement on Tuesday.

Advertisement
Embattled China Evergrande Group developed The Vertex, but reportedly sold its share to partner VMS Group last November. Before the change of ownership, Evergrande faced a conflict with agents over unpaid commissions, which was resolved after VMS Group took over. The developer started to deliver homes to buyers in May.
Advertisement