Recent data shows Hong Kong property buyers are quick to pick up a bargain. As home prices come under pressure due to internal and external factors, transactions have risen, especially in the luxury sector.
According to Knight Frank, transactions for homes of more than HK$10 million increased by about 50 per cent last month. A house at Regalia Bay, with an asking price of HK$80 million, was sold for HK$68 million, which was a 15 per cent discount. A high-floor flat at The Harbourside was sold for HK$34 million, about 6 per cent below the asking price.
The international property consulting company notes that individual investors willing to lower asking prices were mainly those holding several units or those who had experienced losses in the stock market.
End-users, generally enjoying low interest rates and have strong holding power, were reluctant to sell their flats at a discount, while the job market and the local economy remained healthy. With housing demand persisting and rents continuing to rise, there were still record-breaking sales.
'The problem of a shortage of residential units will not be solved in the short term. Interest rates are low and rents have continued to rise. Property owners are reluctant to sell their flats at a discount. Even if there is an adjustment, a slight discount of 5 per cent to 10 per cent will be enough to attract buyers with holding power and investors who are looking for an outlet,' says Thomas Lam, head of research at Knight Frank in Greater China.
Given the strength of Hong Kong's economy, the cause of any pessimistic forecasts can only be a political one. The market is cautiously waiting to see if there are any housing policy changes in the next policy address, especially as a new chief executive takes over next year. Investors are delaying decisions, while the views of market experts vary from boom to bust. The market has yet to form a clear sense of direction and the tug of war between rentals and sales in the luxury sector is expected to continue.