As property prices fall, many private property owners have left the market at a loss, and HOS flats with uncompensated premiums have gone to different extremes. Cheung Sha Wan "New HOS King" Kellett Court

Kellett Court, the "new HOS king" in Cheung Sha Wan, has risen above $8 million again, while Fortune Garden in Tai Kok Tsui, the first "$10 million HOS king" in West Kowloon, has lost $4 million again, for the fourth time this year.

According to the Housing Authority, the provisional number of transactions in the HOS Secondary Market (Home Ownership Scheme (HOS) flats and public rental housing (PRH) without premium payment) in August was 111, almost half of the 208 transactions in July, and a 17-month low after the 125 transactions recorded in March last year.

Cheung Sha Wan Kai Lok Court, the "king of HOS flats", which has been occupied for about four years, has risen above $8 million again against the market trend, which is the second highest on the Green List of housing estates in the history of the property market. A 4-room flat with a usable area of 629 sq ft on the upper floor of Block E was initially priced at $9 million, but was finally sold at $8.38 million, or $13,323 per sq ft. The original owner purchased the unit in September 2019 at $4,427,900, at that time, the unit also did not make up for the land premium, holding the goods for nearly 4 years, now changing hands with a profit of $3,952,100, the unit appreciated by 89%.

On the contrary, the overall second-hand property prices of the Centaline City Leading Index CCL, property prices fell by more than 10% during the same period, which can be seen in the new HOS property prices outperformed the market.

Kellett Court this year has recorded 88 Home Ownership Scheme (HOS) II market transactions, the average transaction price of up to $12,500, more expensive than many private buildings. Apart from being located in the urban area, Kellett Court is also close to Nam Cheong MTR Station, which is only a 6-minute walk away. In addition, a number of new luxury flats have been completed in the neighbourhood, such as Harbourfront Landmark and The Seal, which has led to a surge in property prices against the market trend.

According to the information, the most expensive secondary transaction of Kellett Court was recorded in August last year, which is located in the Phoenix floor unit of Block D. The same unit is a practical 631-square-foot 3-bedroom apartment, with a transaction price of $8,680,000 and a foot price of $13,756 per square foot.

At the end of 2019, the "HOS property king" Ho Man Tin Koon Tak Court, recently recorded another transaction, the housing estate Block C, a group of medium-high floor 7 rooms, an area of 483 square feet, without premium at $6.38 million, feet price of $13,209. The original owner bought the flat in January 2020 for $4.159 million, and has held the flat for less than four years, making a strong profit of $2.22 million or 53%.

The public is keen to buy new HOS flats, and most importantly, the Government has set a 30-year guarantee period for HOS flats. For senior HOS flats without premium payment, the impact of mortgage tenure will naturally make the flats less attractive and property prices will not rise as much as the new HOS flats. As the saying goes, the new wave of the Yangtze River pushes the previous wave, so does the HOS property market.

In Mongkok's Fu Wing Garden, which is the first 10 million HOS estate in Hong Kong and is about 25 years old, the price of a 2-room flat has once again failed to reach the $4 million mark.

A low-rise flat in Block 4, with a 2-room partition and a usable area of 431 sq ft, was put up for sale in the Home Ownership Scheme (HOS) 2 market early this month at $4.5 million, and was recently reduced to $3.95 million, with a footage price of $9,165, making it the fourth low-priced transaction of the estate in the year at a price of $3. During the same period of 2019, the price of a similar 2-room flat in the estate was more than $5 million, and is now sold at a flat price of more than 20 per cent.

The Housing Authority has a "Mortgage Loan Guarantee" period for HOS flats. Banks will generally calculate the mortgage period based on 30 years from the date of the first sale of the estate, minus the age of the building, and the repayment period will be up to 25 years, with no need to conduct stress tests and provide income documents.

In the case of Fu Wing Garden, for example, the date of its first sale was June 1998 and there are only five years left in the Government's guarantee period. If the guarantee period has expired, the maximum loan-to-value ratio for an uncompensated HOS flat is only 70%, which is no different from the general secondary market, making the senior HOS flats less appealing to the public.

The fall in property prices in Fu Wing Garden has stimulated transactions to accelerate, with 53 transactions recorded in the first eight months of this year, surpassing the 39 transactions recorded in the whole of last year, with an average transaction price of $10,012 per square foot.

In addition, there have been many times on the "HOS King" throne of Quarry Bay Kornhill Gardens, the first sale date of 1987, due to the guarantee period has expired, in recent years, the transaction is not as good as before, an average of only one or two transactions per month, the property price has also fallen sharply, the 3 room has fallen to five to six million dollars in the transaction.

In the first eight months of this year, Kornhill Garden recorded 14 transactions without premium payment, with an average price of $10,732, compared with the average price of $12,460 during the peak period in 2020, a drop of about 14%.