The Housing Market May Cool Down as Public Debate Unfolds
It's only been a few days since a vacancy tax was proposed by the government, and developers are already abandoning their usual sales tactic of keeping the housing supply scarce and limited. The result is that we are seeing a large number of luxury homes, small- to mid-size units and nano-flats, become available in the market as home builders compete to release and sell new projects. Although we haven't received sales numbers at the time of publication, there's no doubt that buyers now have a lot more options, and that certain developers have concocted various pretexts to offer mortgages with high loan-to-value ratios to attract customers.
Thanks to the influx of new residential properties, agents now have to bring clients to several units at one go, and they would be lucky if a customer is willing to make the purchase on the spot. More frequently, however, faced with so many choices and the uncertainties caused by the Us-china trade war, clients are choosing to stay put and delay their purchase, ignoring the fact that as many private land slots are repurposed for public housing, the supply of private housing may dwindle in the future.
The truth is, Hongkongers have often demonstrated a herd mentality. When there are large numbers of lucky draw applicants and long queues to see show flats, they would automatically assume that the development is a great bargain. On the other hand, when a lesser-known developer launches a project that gets little attention, home seekers are quick to write it off and move on to other options.
If the new housing policies and the trade war do turn out to have a cooling effect on the housing market, I believe that developers will leave no stone unturned in order to sell their new offerings, or else they'll have to resort to a price war to attract prospective buyers.
On the other hand, as the government announced that new HOS and Green Form subsidised flats would be priced according to residents' income instead of market rates, we have seen a decline in the number of home seekers in the secondary market. I suspect that this is because buyers looking for second-hand housing have changed their mind and decided to try their luck at the new HOS, or are taking their time to weigh the pros and cons of the new policies.
So will secondary market rates and sales really take a hit due to the anticipated lowering of new HOS flat prices? Despite recent media coverage on high-priced home sales, I personally don't think it should be taken by buyers as a point of reference. Sure, the new HOS flat prices will be significantly reduced, but the supply will be also be limited. In addition, it will take at least five to six years to turn the recently purchased land plots into residential buildings ready for sale, not to mention that despite the public's optimistic belief, realistically speaking, the chance for any applicant to win the lucky draw is extremely slim. The result is that there are only a small number of level-headed buyers taking advantage of the current housing market conditions by choosing and buying in the secondary market.
With new housing policies switching focus to fixing the supply issue and the Us-china trade war expected to escalate, the housing market may soon enter a cooling period. As public debate on land and housing continues, let's wait and see what the future holds.
另一方面，由於政府公佈新居屋及綠置居售價將改為和市民收入掛 ，放棄了沿用和市價掛 的舊方式，現在已經影響了二手居屋的睇樓量，猜測不少原打算買二手居屋的買家已改變主意等候抽新居屋去，又或者正在消化新房策的利弊，故暫延入市決定。
Stephen Or 柯興捷Executive Director, Century 21 Hilltop Property Agency世紀21富山地產行政總裁