Mortgage cap hike buoyed home sales: report

This drove developers to offer flexible payments and discounts for new projects.

The raising of the mortgage cap for first-time buyers to $8m from $4m helped reverse a decline home sales in the city, Knight Frank reported.

Developers were also noted to offer flexible payment plans and discounts for new projects and unsold stocks, which sped up purchases by homebuyers in the primary market. In particular, units in The Grand Marine and Emerald Bay were sold out in the first round.

“Instead of nano flats, first-time buyers can now afford to purchase small- to medium-sized units. Evidently, demand for these flats rebounded sharply as an immediate reaction to the policy,” the report wrote.

Knight Frank also expects developers to dispose of unsold stock at lower prices from the upcoming implementation of the vacancy tax, but interest rate cut could bring some support to transaction volume.

According to the Land Registry, home sales rose 16.1% MoM to 4,001 units in October after two months of decline.

However, land sales did not fare as well, with bidding interest in the Wong Chuk Hang MTR in particular garnering only six bids. The site was awarded to a consortium with Kerry Properties, Sino Land and Swire Properties at an accommodation value of $10,587 psf.

In addition, a plot in Kai Tak was also sold to a joint venture of Hong Kong and Mainland developers, but only at the bottom of expected price range.

“Although this is a reflection of the prevailing cautious and risk-averse sentiment, the activities themselves are a sign of hopefulness,” the report added.