Despite all that has been going on in Hong Kong, the property market is on full swing once again. Backed by the anticipation on possible US interest rates cuts, local banks in Hong Kong may also reduce their interest rates. This makes it the most opportune time to enter into the market. Sensing this anticipation, six developers have released 817 units for sale over just one weekend.
One particular project, the T-Plus project in Tuen Mun has received 12,000 registrations of interest, the second highest number for this year. This equates to more than 34 buyers vying for a single unit in the 344-unit development. Prices for a 128 sq ft unit, barely enough to park a car, are starting at HK$1.73 million or HK$13,494 psf (SGD$2,350 psf) after discounts. It was reported that 337 of the 344 units were snapped up by buyers, though at huge discounts. Hard to believe, but this is actually the cheapest deal since 2014, when a developer sold 165 sq ft units at Mont Vert in Tai Po for HK$1.65 million per unit.
It is possible that it is purely domestic demand (locals buying houses purely for occupation purpose) that is driving Hong Kong’s property market. The upper echelons of Hong Kong high society are said to be already parking their money elsewhere in places such as Singapore, London and New York. Some are even keeping their hands off of anything related to China and the U.S. due to the ongoing trade war.
In addition, it is not only domestic demand that may be affected. Hong Kong was once the destination for wealth due to its proximity, ease of opening a bank account and language issues, but with the recent tensions, Asia’s super rich are more likely to avoid Hong Kong and look elsewhere.
Wealth managers in Hong Kong say that while that has been much buzz, it is not a fact as they notice that their clients have not been moving much funds out of the special administrative region yet. However, more people are setting up channels to shift funds in case the situation turns dire.