The second-hand property market is dull, leading prices to overall fall, and buyers are holding back.
(by Li Zitian)
The buyers and owners of the second-hand property market have different reactions on the repeated Sino-US trade negotiations. There are speculators selling flats to repay the debts from the failure of future index investment, buyers giving up the houses or resell in lost after signing the sales contract , almost no one visiting the houses in Kowloon on last weekend, and even owners in the North Point of Hong Kong Island providing overall price cut, however, there are also owners tough on pricing and buyers accepting as usual. Some scholars believe that the trade war has little impact on the property market for a long time, but those involved in the relevant import and export trade industry need to pay attention to risks and make early preparations.
The trade war again rang, and the transactions in some urban housing estates became deserted. Ouyang Zhenbang from Centaline expressed, the transactions among four leading housing estates ‘ Four Little Dragons’ in West Kowloon had been dull in recent days, with only 3 cases were recorded in May which were concentrated at the beginning of the month, and the houses visiting volume during Buddha's birthday holiday was almost zero, it may be said real estate agent branches there all had quiet days. Ouyang Zhenbang explained, ‘ Four Little Dragons’ are housing estates that have the most sensitive to economic changes, because the buyers and owners of these housing estates generally have high level knowledge while are not rich, who are more nervous whenever there is any changes.
House in Provident Centre was sold with price cut of HKD1 million.
Cai Jiajun from the Century 21 Sunrise pointed, the prices in North Point has been lowered in an average price reduction of about 2-3% recently, among high floor room A in block 14 of Provident Centre had been put on sale by the owner at HKD21.5 million, which is three-bedroom house in 1,031 sq ft viewing seascape, and it was sold at HKD20.5 million, with the price cut at HKD1 million or 4.7%.
In addition, one buyer settled on one low floor room 3 in block 8 of City Garden in North Point, which had been put on sale at HKD17.5 million by the owner, later the price was cut by about HKD0.5 million to HKD16.98 million, but at the same time of nearly transaction, Trump suddenly announced the addition of tariffs on Chinese goods, causing the buyer to shrink and give up the trading due to the fear of situation worsening.
In respect of the New Territories, Zhuang Guobao from Ricacorp points, the owners’ pricing are continue to tough and the buyers are still entering the market as usual in New Territories West, because the property market there is dominated by rigid demand, so the effect from the trade war has not yet been seen; Recently there are also potential buyers who found out hardly to buy a satisfied home in second hand property market and then turn to the first hand property market, for example, a buyer changed mind to buy one low-rise house of about 300 sq ft in new project L'AQUATIQUE in Tsing Lung Tau which is in remote location but under HKD5 million, seeing all the target listings in Tsuen Wan have exceeded HKD5 million.
Even the starter homes in New Territories are possible to be cut on prices.
Some owners in Fanling District in New Territories East are willing to expand the bargaining space to 3%-5%. Ye Jianwei from Midland stated, one first housing customer from same district bought a two-bedroom house in Belair Monte in Fanling at HKD5.75 million, which is about 3%-4% lower than the transaction price of similar houses in April. It is middle-floor room A in block 6, with the usable area of about 427 sq ft, 2 bedroom, and enjoys the southeast pool view. Ye Jianwei pointed, the original owner had put on sale it at HKD5.98 million, attracting the first housing customer in the same district to negotiate, and cut HKD0.23 million or 3.8% to HKD5.75 million after negotiation.
Scholars: Exporters should be careful.
How ordinary citizens to self-protect facing the changes of Sino-us trade war? The finance and policy department associate professor of Hong Kong Baptist University (HKBU), Mai Cuicai expressed, the Sino-US trade war has little impact on the property market in the long run, and the risk of a trade war is evaluated according to whether the owners can afford it and when they buy, for example, owners who had paid 30-40% of down payment no need to worry about it, but owners who had just paid 10-20% of the down payment may result in negative assets on the books if the property prices fall, while the bank would not "Call loan" as long as the installment is safely paid.
However, the trade wars may strike the trade industries with the United States, so owners of relevant import and export trade occupations must prepare early, and must firstly envisage whether still have the ability to pay installment in the case of salary reduction or layoffs, otherwise, must consider to change job, in case that there is sufficient savings for the transitional living expenses and payables for housing payments.
On the other hand, a tiny house in HOS housing estate Tung Yan Court in Shau Kei Wan was sold at sq ft price of HKD18,910, a new high among HOS houses in Hong Kong Island, which also is the second highest in Hong Kong. It is high floor room 20 in block A of Tung Yan Court, which is open style house in usable area of 211 sq ft, and it was sold at HKD3.99 million with land premium, leading the sq ft price to the new high among HOS houses in Hong Kong Island, slightly higher than the sq ft price of HKD18,779 in last year from the same housing estate. The original owner bought it with land premium at HKD1.76 million in 2012, earning book profit of HKD2.23 million, and the appreciation in 7 years is 1.3 times.
