( By Yan Lunle)
Chief governor Leung Chun-ying pointed Hong Kong property market is not overheating any more. In fact, according to statistics from this news, among 12 months since new strict measures implemented to this January, the supply is gradually backing to stable, and even appears soft landing. All property prices fell from peak level of last year, South Horizons in Ap Lei Chau and Laguna City in Lam Tin among had the most sharply decline at more than 12%, while there were five large projects in down range only within 5%, found by this news according to statistics of Hong Kong ten large blue-chip projects. Industry believed, property price will gently drop and the whole down range this year estimated to be about 15%. This news reviewed the transaction sq ft prices from last year until now of Hong Kong ten large projects which Midland defined, and found the average transactions sq ft prices all fell from peak level by down range at nearly 2% to 13%. The project has the least down range is Kornhill Gardens in Quarry Bay, which was only 1.93%. City One in Sha Tin and Kingswood Villas in Tin Shui Wai which are suitable to young new buyers were weak on price because of many transactions, and their down ranges were 2.43% and 2.67% comparing to peak level of last year.
There are five projects having down range above 5%. South Horizons had the largest falling range, of which the average sq ft price sharply dropped from HKD 13,039 of the peak in last December to HKD 11,369 in this February in two months; The average sq ft price of Laguna City also declined from HKD 10,348 of the peak in last September to HKD 9,097 in this February. The average usable area sq ft price of Taikoo Shing in Hong Kong Island was HKD 13,690 in February, down about 7.63% comparing to HKD 14,821 of the peak in last March; Mei Foo Sun Chuen in Lai Chi Kok and Metro City in Tsueng Kwan also decreased respectively by 7.42% and 5.89% (as shown in figure).
Hong Kong government launched many stamp duty measures to adjust property market from October 2012 to February 2013, including BSD (Buyer Stamp Duty), (enhanced version) SSD (Special Stamp Duty) and DSD (Double Stamp Duty).
Real estate developers looked bad to future market.
Hong Kong property market prediction in the beginning of this year still is down by 5% to 10% in the whole year, but many negative sources and the fail of government land bidding show developers' pessimism of property market in the following two to three years, so the down range may expand to about 15% at the most, expressed by Pan Yongxiang, the Senior Lecturer of Architectural Technology Institute of City University.
As for source that the Fed decided to reduce bond purchases in earlier, it will affect potential buyers in short term, but the actual effect to property market will be less than from stock market. Pan Yongxiang predicted the interest rising will not appear until next year, so he believed users will back to the market and transactions will be stable again after the source being digested by the market in certain period.
The source of interest rising in advance may increase the worry of property purchasing, so it is predicted there will be two phenomenons, which are owners speed up property sale in short term causing transactions up, and property market may get into stalemate again if owners' price cut do not expand after the units being digested by the market, expressed by Bu Shaoming, the Residential Department Chief Executive Officer of Midland. Affecting by many factors recently, he also adjusted the prediction to down range at 15% from 5%-10%.
Bu Shaoming said, the falling of small-medium property will be faster, maybe above 15%, while the transaction price of many second hand projects recently had declined by about 10% than of the peak period, making the rise of transactions; And luxury property may fall by about 10% since owners are more powerful to keep the property.
First hand property and second hand property being cut on price by turns.
In fact, property market in this year obviously has larger change, with first hand property pricing is lower, some of which even at price lower than second hand property price, and price cut shows by turns between first hand property market and second hand property market. Second hand property market also appeared price cut transactions recently, and there were even losing transactions, which shows some sellers are pessimistic on market trend or have financial difficulty and willing to sell in lost, and this seems is sign of property price falling.
According to data, there were only a few cases in lost in first half of last year, but losing transactions gradually increased in second half year, especially among first hand property market. Taking Valais in Sheung Shui as example, more than 10 cases in this project were all lost in the past one year (some seems were profitable but losing in fact), one single villa in LUZERN BOULEVARD among lost the most, which is in usable area of 2,798 sq ft and resold at HKD 60 million in last August , with sq ft price at HKD 21,444, losing HKD 6.48 million on book.
