Hong Kong property sales in September increased in both volume and value, according to official data, as the city’s real estate sector finds support from easing monetary policy and a resurgent stock market.
Total deals in September – covering new and lived-in homes, office spaces, shops, car parking slots and industrial units – rose 6.3 per cent from a month earlier to 6,870 units, with the total value rising 11.9 per cent to HK$53.48 billion (US$6.87 billion), according to data from the Land Registry released on Friday.
The number of deals shot up 79 per cent from a year earlier, with total sales soaring 93.4 per cent, the data showed.
Home sales also increased about 6.7 per cent to 5,643 units, according to the government data. It was the seventh consecutive month that residential deals exceeded 5,000 units.
The official sales numbers were largely in line with estimates from Centaline Property Agency and Ricacorp Properties, two of Hong Kong’s largest property agencies. Centaline had estimated a 6.2 per cent rise in overall deals to 6,862 units, while Ricacorp predicted 6,883 units.
“With interest rate cuts reinstated in September, the Hang Seng Index continuing its upward trajectory to a four-year high and the recent policy address relaxing investment immigration requirements, sentiment in the property market continued to improve,” said Yeung Ming-yee, a senior associate director at Centaline.
“That led to a slight increase in transactions and could push total registrations back above 7,000 in October.”
The rebound in property sales reflected how the local market has stabilised.
The latest official data released in September showed that lived-in home prices gained 1.26 per cent since April. Home rents, meanwhile, logged a 1.12 per cent increase – the largest increment in 14 months – to 198.7, just 1.4 points shy of the peak of 200.1 recorded in August 2019.
After the US Federal Reserve’s 25-basis point rate cut, the Hong Kong Monetary Authority followed suit on September 18, which triggered a 12.5-basis point reduction to the prime lending rates of the city’s three note-issuing banks: HSBC, Standard Chartered and Bank of China (Hong Kong).
The city’s stock market, meanwhile, recorded a 220 per cent jump in the amount of funds raised from new share sales, tightening the bourse’s grip on the top spot in the global initial public offering rankings.
According to property agents, the stock market’s performance was highly correlated to local property sales, although there was a typical lag. Affluent buyers, meanwhile, have reallocated part of their substantial profits from the stock market to buying luxury homes.
A total of 66 companies raised US$23.27 billion on the main board of the Hong Kong stock exchange during the first nine months, according to data released on Tuesday by the London Stock Exchange Group.
That put the city’s bourse well ahead of the New York Stock Exchange, which ranked second with US$16.53 billion and the Nasdaq stock market in third with US$15.32 billion, the data showed.
With several public holidays in October, the number of property deals that were likely to be completed could stall, potentially testing the 6,240 level and marking an eight-month low, according to Derek Chan, head of research at Ricacorp. - SOUTH CHINA MORNING POST
