Hong Kong's real estate market is currently characterized by divergent trends in its primary and secondary markets.
The secondary home market in Hong Kong is experiencing a notable slowdown, with a record-low of three transactions recorded at ten major housing estates over the past weekend, representing the lowest activity level since the Lunar New Year. In contrast, the primary market is witnessing strong sales, highlighted by a price increase in a new project in Yuen Long.
Centaline Property Agency reported a significant 62 percent decline in sales compared to the previous week, reaching a 13-week low with just three transactions. Likewise, Midland Realty observed a 37 percent drop with five transactions during the same period.
On a more positive note, the primary market continues to thrive. The Yoho Hub II development in Yuen Long released an additional 141 flats after the initial batch of 210 units quickly sold out during the first round of sales on Saturday. The third price list revealed the lowest-priced unit at HK$6.64 million, with an average price of HK$16,188 per square foot. Sun Hung Kai Properties, the developer, explained that the latest batch of flats, mostly situated on higher floors, were priced 1 to 2 percent higher due to their elevated positions.
During the weekend's sales, Sun Hung Kai Properties generated approximately HK$2 billion from 201 flats, highlighting 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 who do not possess local identity cards. Property experts, however, suggest that banks are not implementing a blanket ban but are evaluating applications on a case-by-case basis. This approach is primarily due to the challenges involved in verifying the creditworthiness of these potential borrowers.
Eric Tso Tak-ming, chief vice-president of mReferral Mortgage Brokerage Services, commented on the situation, explaining that banks have become more cautious in their lending practices. They now carefully examine various factors such as the type of property, the borrower's employment history, and nationality. Tso mentioned that while banks are reducing cash rebates to cut costs, he does not expect 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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