Hong Kong Throngs of Thousands Defy Bid to Cool Home Market
Buyers queue to get a shot at newly-released developments
(Bloomberg) -- Snaking queues of thousands of prospective apartment buyers in Hong Kong signaled authorities have made no progress in cooling a red-hot property market, where prices are at records.
People were lining up on Friday and over the weekend at Victoria Skye, a luxury project at the former airport site of Kai Tak, and at the Ocean Pride development by Cheung Kong Property Holdings Ltd. and MTR Corp.
Potential buyers wait in line during the first day of sales of the Ocean Pride development on May 25.
“Successive moves by the government in recent memory to cool the property market only resulted in it becoming crazier,” The Standard newspaper said in an editorial on Monday. “The result is a sea of madness.”
The Hong Kong Monetary Authority has been tightening rules for lenders, including restricting levels of lending to developers, as it tries to limit financial risks and take some of the heat out of the market. The Centaline Property Centa-City Leading Index of existing homes has advanced 23 percent in the past year, setting new price records week after week.
At a Legislative Council meeting on Monday, HKMA Chief Executive Norman Chan said levels of demand were reminiscent of 20 years ago -- before Hong Kong suffered a property bust -- and he expressed concern that people with limited financial resources were buying just because they thought prices would only keep going up.
Developers sold 8,616 homes in the first five months of the year, already more than were sold in any first half since new purchasing rules were introduced in 2013, the Hong Kong Economic Times reported.
K&K Property has offered an additional 200 units at Victoria Skye after it sold 306 flats on Saturday, Ming Pao newspaper reported. Cheung Kong will put another 346 up for grabs after selling 496 in a single day, May 26, it said. In both cases, the developers will raise the prices of the additional units by about 2 percent, the newspaper reported.
The Hang Seng Properties Index of developers rose as much as 1.2 percent on Monday, up more than 20 percent this year.
--With assistance from Dominic Lau Moxy Ying Alfred Liu and Jake Ulick
To contact the reporter on this story: Paul Panckhurst in Hong Kong at ppanckhurst@bloomberg.net.
To contact the editor responsible for this story: Sree Vidya Bhaktavatsalam at sbhaktavatsa@bloomberg.net.