Both owner-occupiers and investors are returning to the property market in growing numbers with expectations that prices are set to rise substantially in the near future.
A total of 637 homes were snapped up from July 5 to 11 in the 50 major housing estates monitored by Ricacorp Properties — up 5 per cent from 607 transactions recorded in the previous week. The housing estates in the New Territories recorded the strongest increase in sales, and transaction data from Ricacorp shows that deals completed in the 21 key housing estates in the New Territories increased by 16 per cent to 306 from 263 a week ago.
David Chan Tai-wai, a director at the firm, said: "Property prices in Kowloon and Hong Kong Island have risen to new highs. This has persuaded many to buy homes in the New Territories where prices are lower."
Housing estates such as Jubilee Garden in Fo Tan, Serenity Park in Tai Po, Luk Yeung Sun Chuen in Tsuen Wan and Tierra Verde in Tsing Yi, were in particular demand since property price gains in these areas had lagged behind other estates. Deals done in these estates were up by between 86 per cent and 300 per cent, the strongest growth shown among all estates.
However, sales in the 20 major housing estates in Kowloon fell 7 per cent to 212 as there were two new residential projects, The Hermitage and Lime Stardom in Tai Kok Tsui, released in the market. "Homebuyers and agents focused on the new projects last week," Chan said. "Sales at The Hermitage and Lime Stardom were strong and this gave confidence to home seekers who have become willing to pay higher prices for secondary market properties."
With the rebound in the stock market, Chan now expects the estates will continue to record more than 600 transactions a week.
In the primary market, Lime Stardom, developed by Sun Hung Kai Properties and the Urban Renewal Authority, recorded 330 flat sales in two days following the launch last Saturday. That was about 88 per cent of the units released for sale. As it was one of the few new projects providing smaller units, the investment cost would be less than other new projects targeting middle class and wealthier buyers. Agents estimated half of the buyers were investors.
Sino Land's The Hermitage has meanwhile already sold about 610 flats by Sunday, or 63 per cent of the total number on offer in the project. But the remaining flats will face strong competition for buyers this week as the consortium led by Sun Hung Kai Properties will launch Larvotto, a luxury residential project in Ap Lei Chau, on Saturday.
SHKP plans to release 50 flats for sale at an average price of HK$17,288 per square foot.
This article can be found on South China Morning Post, Wednesday, July 14, 2010