Hong Kong Real Estate: Sales Dip But Values Steady
In the first half of 2013 residential sales figures in Hong Kong real estate indicate that number of sales dropped drastically, by 32.1%, compared to the same time last year. These numbers show that sales have not been this sluggish since 2003 when SARS affected the area.
Despite the major drop in pending and contract sales, home values have seemed to stay steady throughout this evident slump. Reports indicated that 75% of residential sales were small- or medium-sized homes. The larger and more luxury markets have slowed, and tended toward leases.
The majority of the market has been controlled by first-time buyers and end users, while luxury and foreign purchasers have stayed away during this specific period.
The government reacted with actions to stimulate the market, including allowing second-home owners to buy flats without the standard premiums. Also, an extension which allowed pre-sale of unfinished projects to take place 10 months sooner than otherwise would be normal. A slightly noticeable increase occurred from the second-home scheme, while no changes are expected to occur from the pre-sale extension scheme as supply volumes will not increase.
Hong Kong's leasing market has continued to be stable, as the interest in purchasing apparently wanes. Much of this activity involved lease renewals and/or relocations.
In the commercial office sales market, a major drop was recorded due to the double stamp duty which went into effect in February 2013. A drop from 412 sales in February 2013 to 78 in April 2013.
How will this information affect your activity in the Hong Kong real estate market? Do you see these trends in your area?
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Photo Courtesy of inkelv1122’s Flickr