Buyers spurn Hong Kong’s first home sale in two months, as
Covid-19 outbreak adds weight to a slumping property market
Hong Kong’s homebuyers spurned the
city’s first property sale in two months, as larger-than-usual discounts failed
to attract them to big-ticket financial commitments amid a slumping economy
wrecked by a coronavirus outbreak.
China Evergrande sold 49 of the 141
flats on offer at the second phase of its Emerald Bay project in Tuen Mun as at
5pm, even after increasing the discounts on each unit by HK$20,000 per square
foot to an average of 14 per cent, from the previous 11 per cent, according to
sales agents.
“Everyone is worried,” because the
coronavirus “epidemic is so serious,” agent said. A sales haul of 34 per cent
is “already very good [considering how] the price is not exceptionally cheap,” the
agent said.
The reception at Hong Kong’s first
major property launch in two months underscores the correction that is underway
in the world’s most expensive residential property market, as the local economy
finds itself in the first technical recession in more than a decade. It’s a
slump that still has ways to go, even after the Hong Kong Monetary Authority slashed
its base lending rate by 50 points on March 4 in lockstep with an emergency cut
in the cost of money by the US Federal Reserve.
“The price [of Phase Two] is similar
to that of Phase One,” another said, adding that the developer was also
offering small units priced between HK$4 million and HK$5 million for buyers.
Emerald Bay, comprising 1,982
apartment units and 22 villas in Tuen Mun, is Evergrande’s maiden project in
Hong Kong, as one of China’s biggest developers seeks to establish a beach head
for expanding offshore. Its first offering of 167 flats last October sold out
in one day, as the developer slashed prices amid easier mortgage financing
rules to attract homebuyers to a neighbourhood that had been the focus of
several anti-government protests.
Sales had been lacklustre after the
first launch. With Evergrande’s latest discounts, a 461-square foot flat
originally listed at HK$9.41 million could be bought for HK$8.07 million.
But this time around, sales agents
are facing a hard time getting “worried” customers out of their homes to
consider buying property. As many as 109 people were confirmed to have caught
the coronavirus in Hong Kong, with two dead. Schools are shut until after
Easter, while public servants and businesses had been asked to work from home
to contain the outbreak, all of which are damping consumption and retail sales.
“Some buyers are worried about the
health consequences of attending property sales, and decided to delay their buying
decisions to avoid crowds [at sales venues],” the agent said. “Without the
coronavirus epidemic, sales result would be 20 to 30 per cent better.”
Flat viewings have dwindled and
transaction volumes shrunk in private housing estates, where some infected
residents were detected by health authorities. Residents of some housing
estates in Tuen Mun, the neighbourhood where Emerald Bay is located, were
revealed to have caught the Covid-19 pathogen, according to the Department of
Health.
The remainder of Evergrande’s unsold
Phase Two flats will be offered on March 14 and March 28. The developer will
have some competition to contend with.
Wheelock Properties, which owns the
developer of the Harbour City and Times Square shopping centres, offered
discounts of up to 22.1 per cent on average for 101 flats at its Ocean Marini
project at Lohas Park in Tseung Kwan O.
The properties – including 52
two-bedroom units with open kitchens, and ranging from 471 to 616 square feet –
were originally priced at an average of HK$18,853 per square foot. A sale date
has not yet been set.
“The Lohas Park project will be
better,” the agent said. “[Emerald Bay] has been selling a long time. It’s not
new. Its phase one still has a lot of remaining stock. If it were a new
project, it would be better.”
(South China Morning Post)
