Sales and prices falling in Hong Kong: Report

Residential sales increased by 2% month on month in Hong Kong in May, but transactions are down 11% year on year, the latest Land Registry figures show.

But with developers offering deeper discounts and more incentives, a number of primary projects received a positive market response, according to the latest market analysis from international real estate firm Knight Frank.

It points out that prices have dropped for seven consecutive months by a cumulative 11%, according to provisional figures from the Rating and Valuation Department. Mass residential prices led the decline, losing 11% in the period, while luxury residential prices dipped 8%.

The report suggests that clouded by a potential US interest rate rise in June and abundant upcoming supply, residential land prices continued to edge down. A domestic site in Pak Shek Kok, Tai Po was sold last month for an accommodation value of HK$3,620 per square foot, down about 20% from eight months ago when the adjacent site was sold.

However, the super luxury sector remained strong, indicated by a Shenzhen buyer’s acquisition of a 9,212 square foot luxury house at Gough Hill Road on The Peak for a reported HK$2.1 billion approximately, a record price for the city.

Knight Frank expects more mainland buyers to return to the market in the future and points out that a number of primary projects are scheduled for release in June, hoping to reach the market before a possible US interest rate rise.