Hong Kong’s homebuyers would rather forfeit their deposits than pay above-market prices
- The 308 cases in the first half of the year have already exceeded last year’s total of 261, according to data from Centaline
The number of new-home buyers who have forfeited their deposits has jumped by nearly a fifth in the first half compared with the whole of last year amid a persistent slump in property prices, according to Centaline Properties Research.
There were 149 forfeitures in the second quarter, compared with 159 in the first three months of the year, the Centaline data showed. The 308 forfeitures in the year’s first six months have already exceeded the 261 cases for 2023.
The numbers swelled after billionaire Li Ka-shing family’s flagship developer CK Asset asked the buyers of units at its #Lyos housing project, who did not go ahead with their purchases, to pay the price difference after reselling the flats at discounts of as much as 32 per cent, according to local media reports.
“The original buyers chose stage payment plan and bought the flats when the market was at its peak in 2021,” said Roen Yeung Ming-yee, senior associate director at Centaline. These buyers may have forfeited the deposit with the idea of repurchasing the same flat now as prices have dropped considerably over the past few years, she added.
Buyers who use the stage payment plan only start mortgage repayments after the property is handed over to them. Developers usually take an upfront deposit of up to 15 per cent of the purchase price.
Hong Kong’s official home price index fell 1.2 per cent month on month in June, the lowest since October 2016. That has brought the decline of second-hand homes to 3.1 per cent in the first half of the year.
