The latest news within the real estate sector shows that in Hong Kong the demand for new residential units is continuing to increase whereas the sales of other type of homes are slowly decreasing.
It appears that developers are laying their hands on the entire market thanks to their very attractive deals that accompany each new building project they launch. On the other hand, sellers of other properties cannot match up to these offers so the demand for their properties is slowing down.
Just in July 2014, 7,792 homes were sold which means an increase of 95.5% year on year. And this isn’t all as August has revealed the same tendency for fast growing number of sales, and this was clearly shown by the Le Riviera in Shau Kei Wan, where 21 out of its first batch of 30 units were sold right on the first day of launch.
On the opposite pole there is the re-sales market that came to a halt because of the limited offer of small homes and the determination of the sellers to keep the prices high. As a result of this, buyers have moved their attention towards new projects that are paired up by sweeteners.
It seems that Mont Vert I in Tai Po designed by Cheung Kong has managed on the first Saturday of August to sell 140 units of its second batch of 246 units. A few important transactions took place in July and these were on the luxury residential market, as well as the third flat at Opus in Mid-Levels East with the incredible price of HK$430 million.
The luxury residential prices have shown a marginal increase of 0.4% from month to month, still the sector remained passive because the government took some tempering measures and adopted an uncertain external economy.
One of the most noticeable trends is the one regarding leasing demand for luxury homes which has increased visibly at the end of the second quarter. This is due to expatriated families who are searching for a home before the beginning of the new school year.
However, it is clear that starting with July, the average rental became constant and it represents HK$41 per square foot per month, and economic analysts believe that it will remain stable for 2015 as well.
Hong Kong’s residential leasing market has a traditional peak season when overseas students rush to search for a convenient accommodation. The result of this process consists of rents increase up to 5%-10% due to the strong demand. The areas that are influenced by this are the ones near campuses, like Sha Tin, Fanling, Hung Hom and Sai Ying Pun.
For instance, one flat with three bedrooms, measuring 650 square foot, located at Whampoa Estate in Hung Hom can be leased for HK$18,000 per month or HK$40.7 per square foot. This is a record leasing price.
Even though primary homes show a rising supply, the prices continue to grow as the demand increases by the day due to home upgraders and local end users. It has been forecasted that mass home prices will remain constant or grow by 5% in 2015.