Hong Kong property developers have increased the number of homes offered for sale after chief executive Carrie Lam imposed a vacancy tax, but there’s little sign of cooling in the market.
Sun Hung Kai Properties Ltd offered 45 flats in North Point for sale yesterday, varying from studios to two-bedroom apartments.
The prices ranged from HK$10.25mn ($1.3mn) to HK$21.87mn ($2.8mn), or HK$36,738 ($4,681) per square foot on average, after factoring in a maximum discount of 19%.
About 480 people submitted bids, with the 286-square-foot studio apartments, selling at HK$10.25mn, reaching a record price for the area, according to Midland Realty Services Ltd. Lam last month introduced a so-called vacancy tax in an attempt to cool a property market that’s risen more than 50% over the past five years.
“The developers are cooperative with the new vacancy tax. The launches of new units are becoming quicker,” said Louis Chan, Asia-Pacific vice-chairman and chief executive of the residential division of Centaline Property Agency Ltd.
The apartments are part of Sun Hung Kai’s luxury project Victoria Harbour, which used to be the largest public housing estate in the Eastern District. On Saturday, the developer offered 168 units for sale at its project St Martin in Tai Po, an increase from the 128 originally planned.
Hong Kong Plans to charge additional rates on unsold primary homes.
If approved by lawmakers, Lam’s proposal will require apartments left unsold for more than six months to be taxed at twice the annual rental income, or about 5% of the unit’s value.
As of March, Sun Hung Kai had the largest number of empty or unsold apartments in the city, about 2,700, according to Morgan Stanley, citing Centaline.
One of the prospective buyers for North Point units still sees value in the properties, despite the prices.
“The prices are indeed very expensive, but what else can I buy to maintain the value of my investment?” said Vivian Wang, as she queued up with other bidders. Centaline said 70% of the people who submitted applications through them were investors rather than home-seekers, compared with 50% through Midland’s.
Hong Kong may re-examine measures to further restrict sales of homes to non-residents, Radio Television Hong Kong reported, citing the city’s chief executive. Lam told lawmakers last week that if property cooling measures don’t work, the government will consider other ways of reining in the market.
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