Hong Kong however is showing that its affinity for real estate has been unaffected by a year of anti-government protests and concerns over the coronavirus, with a large housing project launched this month registering the highest response in over two decades.
When the Pavilia Farm development in the New Territories district opened for subscription, eager buyers stocked up on food and water as they prepared for a long wait at the end of a snaking queue where signs read: "Expected waiting time: 8 hours." This response is possibly due to its attractively priced units from around Singapore dollars S$3,8xx psf onwards and located close to the busy Kowloon district. The first phase launch of the Pavilia Farm development received close to 23,000 subscriptions for its first 391 units and totally sold out all first phased units within hours prompting developer to consider increasing pricing for its upcoming second phase launch. When completed in late 2022 it will have 3,000 apartments consisting of 1 Bedroom (saleable area 278 sqft) to 4 Bedrooms (saleable area 1,383sq.ft.).
From what we understand, Hong Kong condo property's saleable area includes a portion of the common area directly outside the apartment and property buyers usually have to pay extra hundreds of thousands of dollars to buy a separate parking lot if they own a car.
But it comes after social upheaval in the past year over China's plans to introduce a national security law in Hong Kong, which has led many investors to question the future of the global financial hub. However, Hong Kong's home prices dropped just 4 per cent since a peak in May last year before the outbreak of protests and the spread of the coronavirus, supported by strong demand, a severe land shortage and low interest rates. This followed a six-fold rise in the index of private home prices since 2003.
The property market has accumulated over a year of demand since the social movement last June; the monthly transaction volume has been lower than usual, however people's confidence has come back after seeing (residential) prices have stayed resilient even during the Covid-19 outbreak.
Pavilia Farm is being built by New World Development and MTR Corp above the Tai Wai railway station, on the train line into Kowloon and Hong Kong Island, and will have a large shopping mall in its lower floors.
Buyers said they were unconcerned about the exodus of residents following the protests last year as well as the possibility of a crash in prices.
Early this year in Jan 2020, media in Hong Kong reported many experienced property analysts predicting that Hong Kong's property market will experience a "double whammy" of coronavirus and protests which analysts expected to send Hong Kong’s home prices plunging in 2020.
Now Hong Kong's property analysts are singing another tune as they believe that the overwhelming response for this project demonstrates a rebound in the Hong Kong property sector and confidence from home buyers as property is still seen as a better way of capital conservation. Hong kong public felt there's limited investment channels right now and equity is believed as being too volatile for the masses.