Secondary property deals hit a five-week high in Hong Kong ahead of the Chinese New Year even as rentals transactions rose amid market uncertainties.

There were 260 rental deals among 15 blue-chip housing estates in the first 25 days of this month, 72 percent more than the 151 purchase deals, suggesting that investors were opting to rent homes amid an uncertain market as sellers refused to cut prices, according to local reports.

The most rental deals came from Tai Koo Shing in Quarry Bay with 53 contracts signed.

Kingswood Villas in Tin Shui Wai followed with 44 deals.

The active rental market was due to high current home prices and concerns over the latest Covid outbreak in the city, according to agents in various districts.

A 657-square-foot flat at Upper Riverbank in Kai Tak was leased at HK$25,000 a month. According to a property agency, the home owner bought the flat for HK$17.12 million in March 2021 and the rental return would amount to 1.8 percent a year.

The rentals market was also boosted because some vendors refused to cut prices, with home owners preferring to rent their flats at this stage and sell them later when the prices rise.

Meanwhile, purchases in the secondary market rose to a five-week high with 14 transactions completed during the weekend of January 29-30 in 10 blue-chip housing estates, 16.7 percent more than in the previous weekend. City One Shatin lead with four deals while South Horizons, Kingswood Villas and Whampoa Garden all had two transactions each.

A property agent said that current travel restrictions led to increased home visits among buyers and stimulated the property market and added that the market will become more active in spring, after the Chinese New Year.

(The Standard)

Demand for Hong Kong’s ‘nano flats’ could slow down, as prices dip and bigger homes become more affordable

Soyo, a nano flat development in Mong Kok, sold only 33 per cent of all 120 flats on offer earlier this month

Nano flats will be bought purely for investment purposes in the future, analyst says

Demand for flats that measure less than 200 sq ft – the so-called nano flats – could slow down as home prices head downwards after peaking in September last year, market watchers said.

These flats, which were once snapped up like hot cakes especially by younger buyers, appear to have lost their appeal. Soyo, a nano flat development in Mong Kok, sold only 33 per cent of all 120 flats on offer earlier this month. The 152 to 228 sq ft flats were priced starting at HK$3.38 million (US$433,761). In contrast, of the 100 units on sale at The Henley in the Kai Tak area, which started from HK$6 million for 186 sq ft units, 70 per cent were sold in September.

“Home seekers are likely to afford bigger living spaces during a softening property market,” a surveyor said.

The trend would become more obvious, the surveyor said, after the government last month set the minimum size for such flats at 280 sq ft for government land. A parcel in Tuen Mun, where provide 2,020 units are expected to come up, will be the first to test this rule. “We will see an increase in supply of larger flats once the government rule is extended to more government plots in the future,” the surveyor said.

Hong Kong’s lived-in home prices retreated 1.4 per cent between September and December, according to an index published by the city’s Rating and Valuation Department on Thursday.

Nano flats will be bought purely for investment purposes in the future, the surveyor said, adding that the change in government rules could sap the demand for such flats.

“No one will disagree with the fact that everyone wants to live in bigger flats. But whether one can afford this is another question,” said Derrick Pang Yat-bond, the CEO of Asia Allied Infrastructure Holdings (AAIH), which developed Soyo. The company said nano flats will still be sought-after among youngsters and investors.

Chun Wo Development, a wholly-owned subsidiary of AAIH, built Soyo as well as the Tplus development in Tuen Mun in 2018. Units in Tplus started from 128 sq ft.

“We saw that buyers had snapped up most 150 sq ft flats at Soyo, when the project was put on sale,” Pang said.

The monthly mortgage instalments for these flats was about HK$12,000 a month, lower than average monthly rents of between HK$13,000 and HK$14,000, he said. “At the end, the owners will have a property of their own,” Pang said.

The company was building nano flats as it needed to “react to market demand”, said Dominic Pang Yat-ting, AAIH’s chairman.

“We can produce bigger flats with larger lump sum amounts, which take time to sell. As a small developer, we have to adopt a fast asset turnover strategy to shore up cash flow for future land replenishment. Otherwise, we will lose our competitiveness,” Dominic Pang said.

Nano flats have been marketed as an entry ticket for youngsters with limited budget, a mortgage broker said.

“As the unit size area has been reducing, builders can charge higher in terms of per square footage according to the affordability of homebuyers. It will serve as a price facilitator and influence owners in nearby areas to increase their asking prices and, in turn, push up home values,” the mortgage broker said.

The total transaction value of new flats of sizes less than 200 sq ft amounted to HK$1.1 billion between January and September last year, according to data from Dataelements, which tracks the sales of new flats. The highest average selling prices for such flats was HK$36,600 per square foot, compared with HK$35,500 per square foot for flats with sizes of 250 sq ft or larger, Dataelements said.

“Developers will adopt more realistic pricing strategies once the rule of the game has changed [in favour of bigger flats]. While builders have to build bigger flats, they also need to price their products in accordance to market affordability,” the mortgage broker said.

(South China Morning Post)

九龍灣甲廈低層 呎租僅17元

東九龍甲廈租金相對受壓，消息指，九龍灣富臨中心A座低層E室，面積約1,458平方呎，以每月約25萬元租出，呎租僅約17元。

另灣仔瑞安中心中層13至18室，面積約1,356平方呎，月租約4.7萬元，呎租約35元。

(經濟日報)

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