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Small apartments appear to be bucking a downward trend in Hong Kong’s property sector, gaining in price as the city struggles with a . The prices of bigger homes and commercial property are falling as the coronavirus pandemic, which followed months of social upheaval, has wrought havoc on the local economy, slashing household budgets and causing a . But gains in the prices of small flats in September were enough to counter those drops and push an official gauge back into positive territory for the first time since early summer. The overall home price index rose 0.42 per cent in September to 382.6 after two months of declines amounting to 1.5 per cent, according to data released by the government’s Rating and Valuation Department on Friday.
“The increase was unexpected, but the property market adjustment should continue,” said Thomas Lam, executive director at Knight Frank. “The current real estate market is very distorted.” It was only the prices of homes smaller than 753 square feet that actually went up, with those measuring less than 430 sq ft rising 0.4 per cent. – those larger than 1,722 sq ft – went in the other direction, falling by 1.3 per cent. Small apartments tend to cater to small families and are “more sensitive” to an improvement in market sentiment, according to Derek Chan, head of research at Ricacorp Properties. “Buyers entering the market are mainly [targeting] small to medium sized flats. As sentiment improves, they become more proactive in entering in market,” said Chan. “Then homeowners will have less room for price negotiation or reduction.”
Buyers of bigger homes are more concerned about the longer-term prospects of the market, which “does not [benefit from] stable user demand, so large units, luxury homes continue to be under pressure,” he added. “Buyers are not very proactive in entering the market. Some owners of luxury homes with liquidity needs may sell them at lower prices, driving the prices down.” Based on last year’s peak, residential property prices have fallen by only 3.6 per cent. Some 557 units in three projects will go on sale this weekend. (The Source: South China Morning Post) |
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