Recently, the Hong Kong property market has been quite lively, with new developments seemingly selling well, and developers constantly touting a "recovery." However, a closer look reveals that the hot sellers are mainly large-scale projects. Small to medium-sized developments are pulling out all the stops, employing various tricks to attract buyers.
The Secret Behind Property Market's "Record-Breaking Prices"
Recently, there was news about a property called The Vertex, which continued to sell at "record-breaking prices" despite the market downturn, which seemed incredible. It was later revealed that the developer was offering "rebates" as high as 40% to 50% of the property price! Hong Kong's Sales of First-hand Residential Properties Authority (Sales Authority) has launched an investigation, so buyers must be cautious.
The so-called "rebate" simply means that developers or agents use high rebates to attract buyers. In reality, the amount you pay may not be worth it. It's like a numerical game, making you think you're getting a great deal, but you may be getting trapped.
More importantly, even if the developer offers a high rebate, you must be careful whether your agent will actually give you the money. Some agents may withhold a portion of it, so buyers must keep their eyes open.
Those "Hard-to-Sell" Properties
Besides "rebate" traps, some properties are not selling as well as developers claim.
For example, UNI Residence in Shatin only sold 60% of its units in the first round of sales, and there were also cases of "deposit forfeitures." "Deposit forfeiture" means that buyers paid the deposit but ultimately gave up on the purchase. What does this indicate? It shows that some people may have acted impulsively or realized something was wrong and cut their losses in time.
At the Tuen Mun's project called OMA OMA, the developer directly slashed prices by 41% for the remaining units! How do you think the people who bought the property earlier felt? The property value was directly reduced by more than half.
Keep Your Eyes Open When Buying Property
Therefore, you really need to be careful when buying property now. Don't be misled by false reports of hot sales, and don't let high rebates cloud your judgment.
- Be wary of abnormally high transaction prices: When you see particularly high transaction prices for new properties, be sure to be extra careful and see if there is a "rebate" component.
- Clarify mortgage details with the bank: Banks are now very clever; they will assess the property's true value. So, even if the developer gives you a high rebate, the bank may not give you a loan at the price you expect.
- Be cautious of price cuts on leftover units: Units with price cuts are likely to be unsold units that have been on the market for a long time, and previous owners may have already lost a lot of money.
Property Market Reality: Developers' Survival Strategy
In fact, developers engage in these tricks to survive. With the property market in a downturn, they need to sell their properties as soon as possible and recover funds. Therefore, they will do everything possible to attract buyers.
However, as buyers, we must not be led by the nose. We must maintain a clear head, do our homework, understand market conditions, and make informed decisions.
For example, for OMA OMA, in 2022 it sold for more than 7 million, now it’s cutting price to 4.5 million, a decrease of up to 41%.
| Project | Time | Price (10,000) | Area (sq ft) |
|---|---|---|---|
| Block 2B, 19/F, Flat F | 2022 | 761.9 | 351 |
| Block 2B, 19/F, Flat F | Now | 450 | 351 |
Property Market Future: What Lies Ahead?
The current situation in the Hong Kong property market is very complex, with "rebate" traps, "deposit forfeitures," and developers making significant price cuts. All of this indicates that the property market is undergoing a period of adjustment.
What will happen to the property market in the future? No one can say for sure. However, one thing is certain: you must be cautious when buying property, don't blindly follow the crowd, and make decisions based on your actual situation.
In conclusion, the Hong Kong property market is complex, so buy with caution! I hope everyone can buy their dream home.