Buyers in Hong Kong defied warnings about a housing-bubble burst when they snapped up more than 500 apartments Tuesday – the biggest home sale for the city in five years.
A pair of developers offered 857 apartments for sale on the day following the Mid-Autumn Festival, which is considered a lucky time to buy, the South China Morning Post reported.
For Nan Fung Development’s LP6 project, more than 4,100 buyers entered into a lottery for a chance to buy each of the project’s 707 apartments. That works out to more than five bidders for each available unit. The developer took home $591.6 million in sales for just 480 units.
“Ninety per cent of the potential buyers this time had failed to get a flat in the previous [two] rounds,” Midland Realty CEO Sammy Po said.
The sales rush came on the heels of Financial Secretary Paul Chan Mo-po’s latest warning that Hong Kong’s housing market, which is the world’s most expensive, is heading toward a steep correction.
“Home prices have far exceeded the affordability,” Chan wrote Sunday on his blog. “The housing market has shown signs of cooling in the past few weeks, with drops in price and transaction volume.”
Some analysts have predicted price drops of 10 percent or more over the next year, but that hasn’t phased many buyers.
“[Home prices] will not drop by a large extent,” said a buyer in his 40s identified as Mr. Chim. “Usually prices will rise again after correcting a little.” [SCMP]–Rich Bockmann