_Hong Kong: Residential sales jumped almost 40% month on month in August

In August, residential sales in Hong Kong edged up a notable 37% month-on-month, reaching 5,821 units, according to the Land Registry. The rise was attributable to robust activity in the new homes market.

September 21, 2015

Property prices continued to increased, but they were still down 8% from their peak in September 2015.

A number of new projects offering small flats had strong sales in August. For instance, Ori, in Tuen Mun, sold over 80% of its 370 units in the first batch of sales, while the met BLOSSOM, in Ma On Shan, managed to sell all its 260 units on the first day of its launch. Developers are expected to offer more small flats to meet market demand in the coming months.

Land prices also showed further improvements in the past month, with major developers returning to the market amid satisfactory home sales performance. In one notable sale, a domestic site in Castle Peak Bay, Tuen Mun, was acquired for an accommodation value of HK$4,085 per sq ft, up 22% from two months ago when the adjacent site was sold.

According to the Lands Department, the number of homes pending pre-sale consent reached 14,757 recently, the highest level in 10 months. We expect growth in home prices to remain suppressed despite the recent pickup in sales momentum, given the increase in supply and a potential US interest-rate hike.