86 units in A group sold under effect from interest rising haze and default.
Kong Wen Wei Po News (By Leong Yuet Kam)
Before US publish the policy setting result, Hung Hom Upper East which had 11 defaults in first round put on sale the second batch 242 units at 20:25 last night, until 22:30 last night, A group customers who buy 2 units had finished the house selection, and source pointed 86 units were sold, which means 43 groups purchased while nearly 120 groups withdrew. At 11:00 pm last night, source pointed 143 units were sold. The registration for Tung Chung Sun Hung Kai Century Link 19 units and Century Link II 129 units closed last night, source pointed, about 1,600 registrations had been collected, exceeding about 10 times base on quota of 148 units, and these units will be put on sale tomorrow.
Collecting more than 1,500 registrations above more than 5 times than quota, Hung Hom Upper East put on sale the second batch 242 units last night, and some people waited in line on the site of sale office in Mong Kok Pioneer Centre 3rd floor since last 6 pm, after at 20:15 the draw lots started and A groups customers who buy 2 units selected house since 20:25 pm, which finished at 22:30 pm, besides source pointed 86 units were sold which means 43 groups customers finished the transaction. Developer had expressed there were 160 groups want to buy 2 units, so nearly 120 groups buyers withdrew. B group customers who buy 1 unit selected houses after. At 11:00 pm last night, source pointed 143 units were sold.
Upper East which has long pre-sale term up to 35 months supplies mainly small-medium residences with smallest unit in only 197 sq ft, and most units are from HKD 3 million to HKD 5 million, besides developer provides privilege of down payment in 5% and secondary mortgage plan, so buyer can borrow mortgage up to 95%, attracting many first housing customers and investors. However, in early there was breaking news that this project had 11 defaults, which value at totally HKD 50.98 million, and developer took in deposit at about HKD 2.55 million calculating it is 5% of the property price, making it the new project having the most defaults in recent years and after stock market crash. Developer Kowloon Development responded, these 11 defaults are some real while some caused by buyers want to give up the original one for other houses, 6 units among had been sold at original prices.
Last night, Upper East put on sale the second batch, and potential buyer attendance is up to about 80%, better that first batch result, A group buyers who want to buy 2 units among are some investors with many of them plan to purchase 1 for own use and another 1 for renting, further more there is even family customer intends to buy 4 units, Centaline Kowloon district manager Lau Ying Lam expressed.
Midland: buyers do not withdraw.
Midland Residential Department Chief Executive Officer Po Siuming expressed, attendance of potential buyers registering through their company is 70%, and buyers not withdraw, while the ratio of investors to users is 6:4, besides half of customers on yesterday are mostly under 35 years old, since the houses cost less also there is mortgage up to 95%.
Although FOMC meeting is soon and the interest-rate rise cycle may start, but buyers who want to buy currently have considered the interest rising factors, so there will be no much effect if the rising range is not large, while the second interest rising speed and strength will need to be pay attention to, Po Siuming said.
Since the residence supply increase, leading rent is suppressed, so Hong Kong property price will adjust this year, BoCom International pointed on report yesterday. There will be 15,000 personal residences supplied this year, plus with government's supply, there will be 30,000 in the whole year, which is the first time since 2011 that the new residence supply is more than new family number, the bank explained. In the following three years, yearly average actual private house supply predicted to be 16,000 units, so the property price in the next three years will be continue suppressed.
Bank of Communications estimates property price may fall by 20%.
The rate of renting return is only 3% if the rent not rise, which is not attractive for long term investors, so more owners will sell their houses, BoCom International pointed. While if interest-rate rise cycle starts, property price will drop by up to 20%. Property price declining pressure in following 6 months will increase, and there will be down range by 10% or 20% in the fourth quarter, BoCom International predicted. As for renting price, it may drop by 5% to 10% comparing with current level.
Henderson may be the most sufferer.
About local real estate stock, BoCom International pointed share price has reflected the property price down range is 10% to 15%, so it is believed real estate stock share price will consolidate base on current level. This bank rates the whole real estate stock as worse than leading market, and promising stocks among are The Wharf Limited (0004) which in business of renting and Wheelock (0020) which has recombination potential. And this bank maintains the selling rating on Henderson (0012), because it is the most sufferer under property price adjustment.
