New homes rush flattens second-hand market

Hong Kong's secondary home market saw just three deals at the10 major housing estates over the weekend, the worst week since the Lunar New Year, but the primary market continued to shine, with a Yuen Long project hiking prices by up to 2 percent for its latest price list.

Centaline Property Agency reported three transactions at 10 blue-chip estates over the weekend, down 62 percent from a week ago to a 13-week low.

And Midland Realty posted five deals over the weekend, down 37 percent from the previous week.

Meanwhile, in the primary market, The Yoho Hub II in Yuen Long put another 141 flats on the market yesterday after the first batch of 210 units sold out on Saturday's first round of sales.

The third price list showed that the cheapest was priced at HK$6.64 million while the average price stood at HK$16,188 per square foot.

Sun Hung Kai Properties (0016), the developer, said most of the flats in the latest price list are on higher floors and this is why they are 1 to 2 percent costlier.

SHKP raked in about HK$2 billion from the sales of the 201 flats on Saturday.

In other market news, some major lenders in the city are said to have frozen mortgage applications of mainlanders who do not have Hong Kong identity cards.

Property experts, however, believe banks are not halting these mortgages across the board but are considering them on a case-by-case basis as it is more difficult for them to verify the creditworthiness of these customers.

Apart from reducing cash rebates on mortgages to cut costs, banks are now more prudent in their mortgage business, said Eric Tso Tak-ming, chief vice-president of mReferral Mortgage Brokerage Services.

Every bank has their own set of rules to vet mortgage applicants and they would consider the type of property being bought, the borrower's employment history and their nationality, Tso said, adding that lenders change their mortgage strategies from time to time due to market conditions and risk appetite.

However, he believes banks will not completely stop giving mortgages to mainlanders.

Major lenders, including The Hongkong and Shanghai Banking Corporation, have been reportedly cutting rebates on mortgages since last month to reduce costs, with some lenders fully scraping such rewards.