Sellers keep pushing price-cut buttonBusiness | Samantha Wong 3 Dec 2018
A number of reductions in asking prices have been seen at Kingswood Villas in Tin Shui Wai, brought on by uncertainties in global markets and forecasts of rate hikes by the US Federal Reserve.
A three-bedroom home in Sherwood Court recently changed hands for HK$5.48 million, or HK$8,616 per square foot. That was 26 percent less than the price for the same type of flat two months ago.
Then there was a 636-sq-ft flat listed at HK$6.9 million in the middle of November, Centaline Property noted. In October, however, a similar flat was sold for HK$7.38 million, or HK$11,604 per sq ft.
And a three-bedroom home in Kenswood Court changed hands at HK$4.69 million, or HK$8,570 per sq ft. The 547-sq-ft property was listed at HK$5.2 million last month. Still, the seller bought the flat for HK$1.1 million in 2009.
Across in Taikoo Shing, a homeowner in Tang Kung Mansion aiming to sell a two-bedroom apartment took HK$2 million off the asking price, listing it at HK$12.5 million, or HK$21,441 per sq ft. The same type of flat sold for HK$13.9 million, or HK$23,599 per sq ft, in April this year.
Indeed, property consultancies expect home prices to fall as much as 25 percent next year amid trade tensions between China and the United States.
And the cost of borrowing to buy homes looks sure to increase further in 2019, with Goldman Sachs and JPMorgan sticking by forecasts that the US Fed will raise interest rates four times in 2019.
The China-US trade war also appears to be the biggest potential cause of significant price corrections in 2019 if differences continue, according to Colliers International.
"While market sentiment has been affected by the declining stock market and the US-China trade dispute, we believe the real impact of rising interest rates will start to take effect in 2019," it said.
Private housing demand slowed with a total of 14,413 transactions recorded in the third quarter - a decline of 23.7 percent from the previous three months - according to latest figures from the Land Registry.
Secondary market transactions dropped significantly by 28.8 percent to 9,918 units.
Jones Lang LaSalle said recently that developers have sought to capture divert demand from the secondary market by offering more financing incentives such as loans with higher loan-to-value ratios - up to 80 percent - and aggressive sales strategies like extended payment periods.
With more potential buyers adopting a wait-and-see attitude, it added, "developers have softened asking prices to offload stock, and pressure on sellers to lower prices in the secondary market will only intensify."