Hong Kong's property market sinks to 17-month low in January as Omicron wreaks havoc with deals

Hong Kong’s property market is expected to see even fewer deals in the coming month amid a fifth coronavirus outbreak linked to the Omicron strain, with the overall number of deals in the city sinking to a 17-month low in January.

The overall number of transactions, including residential, commercial and industrial properties, as well as parking spaces, came in at 5,894 in January, down 16.7 per cent month-on-month, according to data from Centaline Property Agency.

“The lower figures reflect the tepid sentiment in the property market, with buyers adopting a wait-and-see attitude about entering the market,” said Wong Leung-sing, a senior associate director of research at Centaline.

The corresponding total transaction value in January dipped 38.4 per cent to a 16-month low of HK$54.07 billion (US$6.94 billion). As there is a delay between signing the deals and registering them with the Land Registry, the figures tend to reflect the situation a month earlier.

The primary residential market saw the biggest drop, with the volume of new homes sold falling 28.4 per cent over the month to a five-month low of 1,069 deals.

Hong Kong developer K Wah International Holdings attributed the slowdown in property market transactions in January to the impact of the coronavirus fifth wave and the Lunar New Year, with most developers postponing their launch plans until after the holiday period.

The overall number of transactions in February may drop by nearly 18 per cent month-on-month to a 23-month low of only about 4,850, the lowest since April 2020, according to an initial estimate by Derek Chan, head of research at Ricacorp Properties.

Chan also attributed the downturn to the impact of the pandemic, with developers eyeing fresh property launches. “Second-hand residential, industrial and commercial properties also saw low numbers of deals due to the Lunar New Year,” said Chan.

Buggle Lau, chief analyst at Midland Realty, said the overall number of transactions in February is expected to fall to 5,400, down 8 per cent from January, mainly due to the slowdown of new property launches in January.

Henderson Land Development said it will launch phase four of its Square Mile development in Western Kowloon, which has over 600 flats, in the first quarter this year.