The year 2022 saw the number of first-hand transactions fall below the 10,000 level, with only around 9,200 transactions recorded, down by almost half year-on-year, due to the epidemic and interest rate hikes. With Hong Kong back in full swing, developers have been playing catch-up this year.

According to Centaline Property, as of yesterday, developers have sold about 3,364 first-hand units in the first quarter of this year, realising about $38.8 billion, a 2.9 times and 2.4 times increase compared to the fourth quarter of last year when there were 859 cases and $11.4 billion.

In order to catch up with last year's sales results, this year's developers have also started to face the reality and some of the new developments are even selling at attractive prices, seeking volume before price, resulting in a number of new developments enjoying a strong first quarter. Phase 2B of SHKP's NOVO LAND in Tuen Mun has sold a total of 693 units since its launch this month, generating over $4.2 billion in cash, making it the highest selling and cash generating property in the first quarter. Together with other properties, SHKP sold nearly 900 units and realised over $7.3 billion in the first quarter, accounting for about 27% and 19% of the market share respectively, making it the "King of Sales" in the first quarter.

The other four major developers, including Cheung Kong Holdings, Henderson Land, Sino Land and Wheelock, also pushed ahead with their sales in the first quarter, selling over 1,500 units and generating sales proceeds of nearly $14 billion.

The customs clearance effect and the gradual release of local and Mainland buying power have stimulated a surge of large transactions in the primary market. In the first quarter of this year alone, there were 185 large transactions of over $30 million for new properties in Hong Kong, involving a total of $12.7 billion, a two-fold and 1.6-fold increase compared to 61 and $4.9 billion respectively in the fourth quarter of last year.

The Kai Tak runway riverscape, a joint venture between China Resources Land (Overseas) and Poly Real Estate, sold 64 units in the first quarter of this year, generating over $3.3 billion in cash, of which 52 were sold for $30 million or more, making it the most popular new property in the first quarter. It is known that the proportion of Mainland buyers in the property was as high as about 70%.

ST. GEORGE'S MANSIONS, a super luxury property in Ho Man Tin developed by Sino Land, sold 16 units in a row during the quarter, realising over $1.5 billion at an average price of $94.01 million per unit.

The number of new property transactions exceeding $100 million also increased, from just 8 in the fourth quarter last year to 29 in the first quarter of this year, a two-fold increase. The largest first-hand transaction in the first quarter of this year was the sale of ALTUS LINK House No. 6 in Mid-Levels East, Phase 2 of SHKP's CENTRAL PEAK, which was sold by tender recently for over $409.6 million at a price of $102,000 per square foot. The second is Jardine's Lookout, a joint venture between ITC and Pan Ocean, which sold a garden unit for $287 million in January this year.

In addition, Kerry Properties' Mid-Levels luxury residential project, Tierra Verde, was finally sold out after nearly four years of sales, with 45 units sold. Kerry Development Director and General Manager of Hong Kong Mr. Tong Yiu-Chung said that the last unit sold today was a 3-bedroom, 3-partition apartment with a saleable area of 1,683 square feet on Level 1B of Block 2, together with a car parking space, for $67.88 million at $40,333 per square foot.

Centaline Property Asia Pacific's Vice Chairman and Chief Executive Officer of the Residential Division, Mr. Chan Wing Kit, believes that developers will remain restrained in opening prices or even reduce prices in order to catch up with the progress of property sales, and that the market will continue to be dominated by first-hand transactions. As for property prices, the Centaline City Leading Index CCL has risen by over 6% in the first quarter of this year. As the pace of interest rate hikes in the US has slowed down, it is believed that it is not far from the top and property prices are expected to rise by over 10% in the first half of the year.