Several reports out of Hong Kong this week have highlighted a steady stream of property purchasers backing out of completing transactions and forfeiting their deposits. Sellers in certain developments are also said to be offering substantial reductions.
Some purchasers may have lost their investment appetite and also their cash following the recent turmoil in China’s markets. Others may be taking a pessimistic view over potential rate rises in the United States, which would influence Hong Kong rates. There have also been several reports from local analysts forecasting a decline of up to 10 percent across the residential market in the coming 12 to 18 months all of which align to scare nervous buyers away.
There have been more than 30 known cases of withdrawals this month alone, one of the largest involved a buyer who had signed an agreement for two flats at a total of HK$11.8 million but chose not to complete therefore sacrificing HK$2.55 million in initial down payment deposits.
The second hand market is also having its challenges, earlier this week agents reported that transactions in the city's secondary market had fallen to a 20 year low.
However the Hong Kong property market has been written off many times in the past few years yet has still pushed higher. Money from mainland China has been pouring into the local market that money though might now be withering or bypassing Hong Kong for other markets such as the US, Europe and Tokyo.
