Valuations pay price for virus resurgence

Property | Staff reporter 24 Sep 2020

Bank valuations at 16 out of the 20 major housing estates fell by up to 6 percent month on month in August as some bearish homeowners slashed asking prices amid a resurgence in the number of Covid-19 cases.

A 697-square-foot unit at Nan Fung Plaza in Hang Hau was valued at HK$8.23 million, down by about 6 percent from July.

In Tsuen Wan, the valuation for a 460-sq-ft flat at Tsuen Wan Centre also went down by 5 percent to HK$5.83 million.

A 508-sq-ft unit at Whampoa Garden in Hung Hom was valued at HK$8.1 million, down by 3 percent.

In Kowloon Bay, the valuation for a 557-sq-ft flat at Telford Gardens also dropped by 3 percent to HK$7.64 million, from HK$7.89 million in July.

Meanwhile, valuations at three housing estates - Sceneway Garden in Lam Tin as well as City Garden and Provident Centre in North Point - remained unchanged last month.

The correction in bank valuations was due to a weaker economy and rising unemployment, said Vincent Cheung Kiu-cho, managing director of Vincorn Consulting and Appraisal.

But Cheung estimated home prices would grow by 3 percent this year due to strong housing demand.

Meanwhile, at 13 out of the 15 major housing estates, transaction prices saw decreases of up to 9 percent compared to July, prompting an increase in the number of transactions.

In Quarry Bay, transaction prices at Taikoo Shing dived by 9 percent to HK$18,700 per sq ft. The number of transactions increased by 14.8 percent to 31.

The average transaction price at Metro Harbour View in Tai Kok Tsui dropped by 5 percent to HK$18,265 per sq ft, and the number of transactions surged by 50 percent to 15.

In Tin Shui Wai, the average transaction price at Kingswood Villas fell by 3 percent to HK$10,538 per sq ft, and the number of transactions rose by 34 percent to 43.

Homeowners are willing to cut asking prices further to attract buyers, so the number of transactions rallied, said Midland Realty.

However, the luxury property market saw more loss-making sales in the first eight months.

Dragons Range in Sha Tin recorded 30 secondary transactions during the period, among which 14 were loss-making sales, data from the Land Registry showed.

In Tai Po, about 81 percent of the 16 transactions at The Beverly Hills were loss-making.

A 2,115-sq-ft luxury house at the project changed hands for HK$22.28 million, or HK$10,534 per sq ft. The vendor will suffer a loss of HK$8.41 million.

In Sheung Shui, all six transactions at Valais were loss-making.

One of the vendors will suffer a loss of HK$8 million after selling their 2,792-sq-ft house for HK$57 million, or HK$20,415 per sq ft.

In Hung Hom, five out of the six secondary transactions at Homantin Hillside were loss-making.

The housing market has not been very active at some estates that are far away from the urban area, so homeowners have had to further cut their asking prices to find buyers, said Sammy Po Siu-ming, chief executive of Midland Realty's residential division.

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November 2020

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