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Hong Kong Real Estate: Divergent Trends in Primary and Secondary Markets

Squarefoot Editor  2024-05-13  #Property Hit News

Hong Kong's secondary home market experienced a significant slowdown with only three transactions recorded at 10 major housing estates over the last weekend, marking the lowest activity level since the Lunar New Year. In stark contrast, the primary market saw robust sales, highlighted by a price increase in a new Yuen Long project.

Centaline Property Agency noted a 62 percent decrease in sales from the previous week, hitting a 13-week low with just three sales. Similarly, Midland Realty reported a 37 percent drop with five transactions over the same period.

On the brighter side, the primary market continued to flourish. The Yoho Hub II in Yuen Long released an additional 141 flats after quickly selling out the initial batch of 210 units during the first round of sales on Saturday. The third price list revealed the lowest priced unit at HK$6.64 million, with the average price reaching HK$16,188 per square foot. Sun Hung Kai Properties, the developer, explained that the latest batch of flats, mostly located on higher floors, were priced 1 to 2 percent higher due to their elevated positions.

From the weekend's sales, SHKP garnered approximately HK$2 billion from 201 flats, underscoring the strong demand in the primary market.

In other news, there have been reports of major lenders in Hong Kong freezing mortgage applications from mainlanders lacking local identity cards. Despite these concerns, property experts suggest that banks are not implementing a blanket ban but are assessing applications on a case-by-case basis. This approach is mainly due to the challenges in verifying the creditworthiness of these prospective borrowers.

Eric Tso Tak-ming, chief vice-president of mReferral Mortgage Brokerage Services, commented on the situation, stating that banks have become more cautious in their lending practices. They now scrutinize various factors such as the type of property, the borrower's employment history, and nationality. He mentioned that while banks are reducing cash rebates to cut costs, he does not anticipate a complete cessation of mortgages to mainlanders.

Major banks, including The Hongkong and Shanghai Banking Corporation, have also scaled back on mortgage rebates since last month as part of their cost-cutting measures, with some completely eliminating such incentives. 

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