Developers and agents, desperate for transactions, have cut many of the latest deals at deep discounts.
The first batch of Wheelock’s brand new Lohas Park apartments were sold at 8 per cent lower than the average asking per sq ft price of resale units in the vicinity. CK Asset’s Blue Coast flats were 27 per cent cheaper than the average per sq ft price of new homes in nearby development La Montagne, sold just eight months earlier.
The downward trend looks set to continue, with the US Federal Reserve reluctant to lower interest rates for now and Hong Kong developers due to release more units for sale in the coming months.
Property consultancy JLL Hong Kong has estimated that more than 20,000 new flats remain unsold in the market. Having more new flats available – and at big discounts – will push down prices of resale units, which are now also in greater supply as home owners are no longer taxed for selling early.
Average prices of resale homes have already dropped by nearly a quarter since a peak in August 2021. In February, they reached their lowest level since September 2016. S&P Global Ratings has said it expects prices to fall a further 5 per cent to 10 per cent in 2024.
Public flats have been affected, too, with more than 130 cases of people pulling out of deals in March as cheaper private homes or bigger units fell within their means.