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Hong Kong homeowners slash prices as they race to sell before property values fall further
- Owners are only managing to attract buyers when they cut prices by at least 10 per cent from what they were two months ago, says analyst
- Analysts warned a further fall in pre-owned home prices could fire up the number of negative equity cases in the coming months
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Homeowners in Hong Kong are offering steep discounts as they race to offload their properties quickly before the market falls further.
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In a recent case that underscores the trend, a seller in Tai Po was forced to take a 28 per cent loss when he offloaded his property for HK$4.3 million (US$550,000) less than he had paid for it in 2019.
Owners are only managing to attract buyers when they cut prices by at least 10 per cent from what they were two months ago, said Louis Chan Wing-kit, CEO of the residential division at Centaline Property Agency.
“If [owners] want to offload their properties now, they have to cut asking prices substantially as home prices are likely to fall further in the coming quarters,” he said.
On Monday, the Hong Kong Monetary Authority (HKMA) said the delinquency rate on residential mortgage loans in negative equity between April and June increased to 0.09 per cent from 0.04 per cent at the end of March.
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There were 3,341 cases of negative equity – where the value of a home falls below that of the mortgage on it – at the end of June, the results of a quarterly survey by the HKMA showed. This was a 47.6 per cent drop from 6,379 instances in the previous quarter.
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