Home News Investors rush to buy in first-weekend property sales despite biggest base rate rise in 22 years

Investors rush to buy in first-weekend property sales despite biggest base rate rise in 22 years

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Investors are rushing to anticipate the rising interest rate cycle by soaring a new flat on the first weekend of real estate sales after the Hong Kong Monetary Authority (HKMA) showed the largest rise in interest rates in 22 years earlier this month. I was there.

By 6 pm on Saturday, 66 of the 88 units available in the two separate projects were purchased, according to realtors. Strong demand suggests that higher interest rates are not damaging the sentiment of the real estate market.

Kerry Properties has sold 57 of the 60 one-bedroom units offered in the housing project at Homantin’s 10 LaSalle Development. Realtors expect that almost or all may be sold out by the end of the day.

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Offer prices for units between 319 and 409 square feet range from HK $ 7.38 million (US $ 940,000) to HK $ 10.99 million. The average developer discounted price was HK $ 24,258 per square foot.

“The US Federal Reserve’s interest rate and the Hong Kong Monetary Authority’s base interest rate hike are well-anticipated and are not a surprise to the market. Homebuyers are ready to pay more for mortgages in the coming years. It’s done, “said Vice-Chair Luis Chan. Chief Executive Officer of the Housing Division of the Centaline Property Agency in the Asia Pacific region.

“The strong reaction to weekend sales is due to the fact that sales were almost flat in the first quarter, but homebuyers are back in the market when developers launch new projects,” said Chan. Added.He also said investors may believe that the political situation is more stable. John Lee’s election last Sunday As the city’s next chief executive officer.

Hong Kong’s funding costs have skyrocketed in 22 years as Hong Kong’s de facto central bank raised its base lending rate by 50 basis points to 1.25%, following the Federal Reserve Board. This showed the largest temporary increase in Fed rate hikes since 2000.

The basic charge for Hong Kong is Up to 4% by the end of 2023..

“Rising interest rates haven’t changed real estate sentiment yet,” said Sammy Po Xiumin, chief executive officer of Midland Realty’s housing sector, and interest rates on commercial mortgages are still rising. He added that he didn’t. Currently, most mortgage rates are around 2 percent.

“Even if interbank rates and prime rates rise later this year, that won’t be substantive,” Poe said. “People can afford to pay their mortgages at the expected rate hike. The real estate outlook for the Hong Kong market remains bright.”

According to Vincent Cheung, Managing Director of Vincorn Consulting and Appraisal, some homebuyers are rushing to buy now in anticipation of further rate hikes. “They are afraid that they may not be able to pass next year’s stress test requirements and therefore may not be able to get a mortgage,” he said.

Hong Kong stress tests require all new mortgage borrowers to prove that they have enough income to withstand interest rate increases of up to 3 percentage points from the time of application.

“Many customers may be able to pass stress tests in a low interest rate environment, but may not be able to pass the threshold next year,” said Chan. “Developers also want to launch a project to sell now before prices go up, so we’ll see more new flat transactions in the coming months.”

The Kerry Properties project at 10 LaSalle Road in Kowloon is a traditional low-density luxury residential area famous for its famous schools nearby. 10 LaSalle is a 17-story building offering a total of 73 units. The other 12 3-bedroom units and one 4-bedroom unit are sold in bids.

Prior to the sale, 10 LaSalle received 900 registrations from interested buyers. That is, about 15 interested buyers were chasing each of the 60 units offered on Saturday.

Separately, Henderson Land sold 9 of 28 units by 6 pm on Saturday at Quinn Square Mile, a residential project in Thai Cock Tui.All units are 1 bedroom flat and studio

View of Quinn Square Mile built by Henderson Land on May 13th at 5 Shammon Road in Thai Cock Tui. Photo: Edmond So alt = View of Quinn Square Mile built by Henderson Land on 5 Shammon Road in Thai Cock Tui May 13th. Photo: Edmond So>

The cheapest 206 sq ft unit was offered at a price of HK $ 4.54 million and the most expensive flat was offered at a price of HK $ 7.21 million at 320 sq ft.

The developer already had Sold 51 units of Quinn Square Miles May 1st. The average discounted price ranged from HK $ 20,971 to HK $ 24,353 per square foot.

According to Po, the Quinn Square Mile units remain, so they will sell at a slower pace than other new projects. However, there are still buyers who are interested in the project, especially young buyers.

Real estate sales recovered this month after the fifth wave of Covid-19 subsided in the city. In Hong Kong, there were no new flat sales in February and March. This is because developers have delayed the launch of new projects due to Hong Kong-related outbreaks and social distance measures.

With a total of 614 units of Quinn Square Miles, there is also a two-bedroom flat up to 382 square feet. The first batch unit, after discounting, was sold at an average selling price of HK $ 23,928 per square foot. Developer.

This article was originally South China Morning Post (SCMP), The most prestigious voice reporting on China and Asia for over a century. For other SCMP stories, SCMP app Or visit SCMP Facebook When twitter page. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

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

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