It should not come as a surprise that the residential property prices have dropped 8.3% on the year in Hong Kong just in May 2016 according to global real estate consultant JLL.
Even though the sales grew to 2% m-o-m to 4,586 in April, they are still below the long-term monthly average of 7,656 With that in mind, it seems that the launches for new projects ( such as Sun Hung Kai Properties' Shau Kei Wan project, Manhattan's Homantin project, the Paliburg and Regal Hotels project in Sham Shui Po, China Overseas' One Kai Tak and HKR International's project in Tuen Mun) will not remain in the limelight. JLL's Henry Mok, regional director of Capital Markets commented: "Large developers with relatively healthy cash positions have recently been using aggressive financing schemes to lift market attention. Smaller developers, in contrast, resorted to offering outright price cuts to lure buyers. Despite home prices having stabilized in recent months, new launches will significantly increase in July and August. As such, we expect developers to be pricing their flats conservatively, putting further pressure on secondary market prices." Stella Abraham, Head of Residential Leasing and Relocation Services at JLL, also added : "The decline in residential rentals is expected to have narrowed in recent months, on the back of strong seasonal leasing activity. We are continuing to see the emergence of a two-tiered market, with properties offering monthly rents between HKD30,000 and HKD100,000 still highly sought after and demand for stock with monthly rents over HKD100,000 remaining subdued. Meanwhile, rents of properties in the HKD70,000-100,000 range stabilized against limited available stock in that budget range."