Border hope and low rates fuel valuations

Property | Staff reporter 8 Jul 2021

The imminent reopening of the border between the mainland and Hong Kong, coupled with the continued low-interest rate environment, has prompted bank valuations of flats to rise.

Seventeen out of the 20 index housing estates have seen increases in the latest valuations, accounting for 85 percent of the total, with the rises ranging from 0.6 to 6.8 percent.

Valuations for the remaining three housing estates stayed flat, with no declines recorded, showing that banks have taken a more aggressive stance.

The Rating and Valuation Department says the private domestic price index has risen for five consecutive months, with the increases amounting to about 3.6 percent cumulatively.

The latest index is back to the June 2019 level, which shows the market has emerged from the haze cast by the epidemic.

Of the estates, Kingswood Villas in Tin Shui Wai was the standout performer.

Ming Tse, the executive director of Many Wells Property, said that properties in New Territories west have the lowest average housing price along the Tuen Ma line.

As such, savvy buyers have seized the opportunity to enter the market and pushed prices of small-sized units at Kingswood Villas above the HK$6 million mark.

In addition, Wetland Seasons Park's readiness for occupation and the development of infrastructure facilities have increased the potential for price appreciation for residential buildings in the district.

Tse predicts that valuations will continue to rise this month.

Dave Ma Tai-yeung, chief operating officer and director of Kowloon at Hong Kong Property, said that the opening of the Tuen Ma line and the continued low-interest rate environment in Hong Kong have boosted the property market.

He said the unemployment rate in Hong Kong has decreased to 6 percent as the seriousness of the epidemic eases. The figure has been falling for three months.

Capital has flown into the property market and prices are expected to peak in the short term.

However, Ma predicts that prices for the whole year will rise by 15 percent, and there is still room for the trend to go up after the latest rise in valuations.

It was also noted that there were not many high-quality units being put on the market on Hong Kong Island, causing the increase in valuations to be less. Ma expects those units to catch up eventually pricewise.

A 458-square-foot unit at Chestwood Court, Kingswood Villas, which was valued at HK$4.69 million in May, was valued at HK$5.01 million last month, seeing an increase of more than 6.8 percent.

The increase was also the highest among major housing estates for two consecutive months.

Telford Gardens also performed well, with a 493-square-foot unit estimated at HK$7.07 million last month, seeing an increase of nearly 5.7 percent from its valuation of HK$6.69 million in May.

Nan Fung Plaza also saw a rise of more than 4.5 percent as a 697-square-foot unit, with an estimate of HK$8.83 million in May, hit HK$9.23 million in June.

Willy Liu Wai-keung, chief executive of Ricacorp, said that units under HK$10 million were popular with first-home buyers.

He cited Kingswood Villas' recent record-breaking transaction, Telford Gardens benefiting from the launch of new properties in Kai Tak and low-priced units in Nan Fung Plaza been taken up by the market.

Such active transactions in the secondary market drove up overall unit prices, he said.

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