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Hong Kong's buyers give their collective cold shoulder to flats at 3 locations, buying only 15 per cent of 200 units on offer

·3 min read

Hong Kong's property buyers mostly stayed on the sidelines over the weekend, buying up less than 15 per cent of the 200 apartments on offer at three locations across the city.

Country Garden sold 15 of the 70 flats at its Allegro project in Kowloon City, while Henderson Land Development sold eight of 15 of The Quinn apartments in Tai Kok Tsui, according to sales agents. Over at the former airport site at Kai Tak, Wheelock Properties sold six of 115 Monaco Marine units on offer.

"The buying sentiment appeared to be extremely weak," said Sammy Po Siu-ming, chief executive of Midland Realty's residential division. "A bunch of negative factors are still weighing on homebuyers who are still taking a wait-and-see attitude."

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The lukewarm response was in stark contrast to Friday's bumper sale at Grand Mayfair in Yuen Long, where more than 90 per cent of 428 flats on offer were snapped up. The project, jointly developed by Sino Land, K Wah International and China Overseas Land & Investment (COLI), has recorded more than HK$10.1 billion (US$1.29 billion) in proceeds from selling about 1,100 flats in three weeks, making it the most popular property launch of 2022 in the city, the developers' spokeswoman said.

Property buyers waited in line to buy units at Grand Mayfair, a residential development in Yuen Long by Sino Land on May 20, 2022. Photo: Xiaomei Chen alt=Property buyers waited in line to buy units at Grand Mayfair, a residential development in Yuen Long by Sino Land on May 20, 2022. Photo: Xiaomei Chen>

Higher mortgage rates are becoming a primary concern for Hong Kong's banks and developers after the world's most expensive property market took a beating from the fifth wave of the Covid-19 pandemic in the first quarter.

The benchmark one-month Hong Kong Interbank Offered Rate (Hibor) could rise to 1.5 per cent in the third quarter of this year, following in the same upwards trajectory as the higher interest rates set by the US Federal Reserve and the Hong Kong Monetary Authority (HKMA).

Aerial view of Wheelock Properties' Monaco Marine development in Kai Tak. Photo: Handout alt=Aerial view of Wheelock Properties' Monaco Marine development in Kai Tak. Photo: Handout>

One-month Hibor stood at 0.19 per cent on Thursday, but has climbed from around 0.15 per cent at the start of the year.

To attract mortgage borrowers, banks are working with brokers and developers to offer attractive cash rebates, limited-edition Octopus cards and even a Tesla car as a lottery prize to boost new home sales and loans.

Hong Kong's unemployment rate rose to 5.4 per cent from February to April, hitting a one-year high due to stringent social-distancing curbs imposed to curb the fifth wave of the city's Covid-19 outbreak, according to data released by the Census and Statistics Department on Thursday.

The jobless rate was 0.4 percentage points higher than the 5 per cent recorded for the January to March period.

Country Garden's Allegro residential development at 138 Carpenter Road in Kowloon City on March 19, 2022. Photo: Jonathan Wong alt=Country Garden's Allegro residential development at 138 Carpenter Road in Kowloon City on March 19, 2022. Photo: Jonathan Wong>

Country Garden's Allegro is the first project wholly-owned by a mainland Chinese developer to start sales so far this year. The development is about 800 metres on foot from the Sung Wong Toi MTR station.

The units on offer over the weekend ranged from 213 to 414 sq ft (19.8 to 38.5 square metres) in size, with prices from HK$4.99 million to HK$10.92 million, or HK$21,887 per square foot to HK$27,198 per square foot after discounts of up to 13 per cent.

Louis Chan, Asia-Pacific ­vice-chairman and CEO of the residential division at Centaline Property Agency, said that the project had attracted many residents in Kowloon because of its convenient location and the big discounts.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.