Prices of newly launched homes fall to decade-low levels

Some projects fail to sell new units despite price cuts.

Prices of newly launched residential projects are more than 10% below those of similar projects in 2015, putting further pressure on secondary home prices, JLL reported.

Market activity in the residential market also moderated after pent-up demand was absorbed. Some new projects are struggling with sell-through rates despite price cuts, including "THE HADDON" in Hung Hom, which sold 13 of 63 units (20.6%) on the first day, and "Amber Place" in Cheung Sha Wan, which sold none of its 30 units launched.

Meanwhile, secondary home prices have rebounded to their 2016 levels, registering 305.9 in May, nearly matching the 306.7 recorded in November 2016.

In May, the average primary transaction unit price of Class A units in Yau Ma Tei was 10.6% below the price in 2015, dropping from $22,768 to $20,346 per sq ft, JLL reported.

In Kennedy Town, the average primary unit price decreased 6.0% over the same period, dropping from $23,424 to $22,022 per sq ft.

In June, HKMA expanded mortgage policies to cover residential properties under construction for self-occupation allowing buyers with provisional sale agreements signed before 28 February to secure loans up to 70% of the property value, addressing concerns on potential declines in property values under the Stage Payment Plan.