Property agents say market sentiment weighed down by higher mortgage rate, sluggish stock market and US-China trade tensions
Home buyers in Hong Kong bought just over half of the flats offered by a major Chinese developer at a new site in the city on Saturday despite incentives, in another sign the world’s most expensive property market is cooling off.
Vanke Property (Hong Kong), a subsidiary of China’s second-largest developer, developed the site. Vanke is a bellwether of the city’s housing market, which has reached a tipping point after a boom running more than two years. Sentiment has been pulled down by rising mortgage rates and the government’s cooling measures.
“The units would have been all sold if not for the poor market sentiment at the moment,” said Louis Chan, vice-chairman and chief executive of residential division for Asia-Pacific at Centaline Property Agency, one of the firms commissioned for the sale.
LePont is one of the first projects to be sold after Hong Kong commercial banks raised benchmark lending rates for the first time in 12 years by 12.5 basis points last Thursday. The move effectively increased the cost of mortgage repayments.
In partnership with Centaline Mortgage Broker, Vanke offered buyers a lower mortgage rate of 2.275 per cent – 10 basis points lower than the standard 2.375 per cent – to counter the impact. It also gave out cash rebates equivalent to 1.95 per cent of the loan amount taken out.
“The result is worse than what we expected,” said Sammy Po, chief executive of the residential division at Midland Realty.
However, Po called the result“not completely negative” given that buyers already snapped up the first batch of 347 flats launched on Monday.
The 310 flats offered on Saturday ranged in size from one to three bedrooms and measured between 335 and 829 square feet.
Prices rose to HK$12,298 per sq ft, compared with HK$9,878 per sq ft for the first batch.
Vanke’s first independently developed residential project in Hong Kong, LePont consists in total of 1,154 flats, including 30 bungalows.
