The effects of the collective sale frenzy two years ago are starting to be seen in the housing market, with pricier units increasing their market share.
A new report noted yesterday that apartments selling for less than $1 million comprised 24 % of all new sales in the second quarter, down from 37 % in the first. And the proportion of new units priced above $3 million hit 5 %, up from 3 %.
The higher prices reflect the lofty amounts paid for collective sale sites from 2017 to mid-2018, reported real estate consultant Edmund Tie & Company. They also reflect the increase in average unit sizes and a greater preference for larger apartments.
It was a little different in the resale market, where the proportion of units priced under $1 million remained unchanged from the first quarter at 24 %. But resale apartments above $3 million accounted for 11 % of sales in the three months to June 30, up from 8 % in the previous quarter.
Prices for resale properties remained relatively stable quarter on quarter. Sales at new non-landed projects hit 3,966 in the first half, up 7.4 % on the same period last year. Transactions in the second quarter alone jumped 30.6 % from the first three months to 2,246 units.
There were 16 new projects launched in the second quarter, up from six in the first, but the total number of units on offer was just 2,700, compared with 4,900 in the January-to-March period.
The rest of central region led the way with nine launches totalling 1,731 units in the second quarter, compared with four projects offering 326 units in the first.
Foreign buyers accounted for 6 % of non-landed private homes sold in the second quarter, up from 5 % in the first. Notably, the proportion of mainland Chinese buyers fell to a low of 22 % in the period, said the report.
Demand for housing loans continued to slow in June, declining for the sixth consecutive month. They fell 0.2 % month on month and 0.4 % year on year.
Edmund Tie said its outlook for the private housing market in this half remains "cautiously optimistic" and it is sticking to its forecast of 8,000 to 10,000 in sales of new units for the year. "With new project launches expected to pick up in (the second half) amid strong headwinds from a slowing local economy, ongoing trade tensions... and the political situation in Hong Kong, demand for non-landed units from foreign buyers may pick up," the report said.
Adapted From The Straits Times, Sep 10th 2019