Hong Kong developers sweeten financing terms for luxury homes after deals tumble in July
- Deals for lived-in homes worth HK$12 million to HK$20 million recorded a 45 per cent drop last month
- More aggressive financing plans can be expected if market sentiment does not improve, Centaline executive says
The number of transactions for lived-in homes worth HK$12 million (US$1.5 million) to HK$20 million dropped last month with just 181 deals completed, a 45 per cent drop from June, according to analysis of Land Registry data by Ricacorp Properties. The sales of homes costing between HK$20.01 million and HK$50 million dropped by 33 per cent to 71 deals.
“Home sales have been dominated by end users who have bought flats at between HK$4 million and HK$6 million. Sales of luxury homes will continue to retreat this month,” said Derek Chan, Ricacorp’s head of research. Homebuyers will be more cautious when investing in bigger homes, because of the higher borrowing costs involved, he added.
Demand for such property is driven by deep-pocketed investors, who will stay away if the market sentiment is not right. A slowdown in Hong Kong’s economy is behind the current down trend. The city’s property sector was already reeling from the impact of 2019’s anti-government protests and the outbreak of Covid-19, which has been affecting business since early 2020. The economy then contracted 4 per cent in the first quarter of this year because of its anti-pandemic measures during the fifth wave of coronavirus infections.
