The HKMA's announcement to relax the loan-to-value ratios in early July had little effect on the property market, and last week's hike in the prime rate (P) by a number of major banks has further aggravated the situation in the primary market, which recorded only about 620 transactions in July, the second consecutive month in which the number of transactions has been below the 1,000 level.

In July, three new developments were launched for sale, including Pinnacle Hill at Wong Chuk Hang Station, Metro I at Hung Shui Kiu and HENLEY PARK at Kai Tak, with a total of over 650 units. However, under the influence of interest rate hikes and the successive price reductions by developers, buyers were mostly on the sidelines, resulting in weak first-hand transactions. As at 30th July, the above three new developments recorded a total of 380 transactions, accounting for nearly 60% of the units launched. Together with other end-of-life products, the primary market has recorded about 620 transactions so far in July, which is only four more than the 616 transactions recorded in June.

Henderson Land (012) recorded more than 10 transactions this month, with a total of about 314 units sold, realising more than $2.8 billion, which is the highest developer in terms of sales volume and sales amount in July, and accounted for half of the first-hand sales volume this month. Among them, HENLEY PARK with low market price of more than 10% of the sale, the first round of sale on July 1, 228 units, sold 183 units or 80% on the same day, so far the cumulative sales of 262 units, cash more than $ 2.4 billion, this month's sales of new construction of the top. Quarry Bay THE HOLBORN new up to 24% discount, sold 27 units this month, cash nearly $190 million.

Henderson's pace of property sales has not slowed down, its Hung Hom Baker Creek Phase 3 BAKER CIRCLE．GREENWICH last week launched the first batch of 56 units of the price list, discounted average price per square foot of $18,928, compared with the first two phases of the Baker Creek series of 10% to 20% lower, it has been pointed out that the project has been oversubscribed by 2.5 times, the earliest this week to open for sale.

On the first weekend after the interest rate hike (29th and 30th), about 10 transactions were recorded in the primary market, which is more than 30% less than the 15 transactions recorded on the previous weekend (22nd and 23rd). Meanwhile, since last Tuesday (25th), the number of flats sold by developers per day has been recorded for six consecutive days, with an average of only about three to seven cases per day.

The slowdown in the pace of new property sales has also led to a reduction in the number of large-sized transactions, with only 9 transactions of over HK$500 million in July. If we exclude the fact that 6 of these transactions were "connected parties of the seller" or internal transfers, the actual number of transactions was 3, which is the lowest since the beginning of this year, and a drop of nearly 80% when compared with the 43 transactions in January.

In July, the largest first-hand transaction, King's Court, a luxury residential property in Kowloon Tong privately owned by King Power's Chairman SIN Wai-pau, sold Residence B by tender, with a saleable area of 7,083 sq ft, an 8-bedroom, 4-unit apartment with two basement parking spaces, for $254.8 million and $35,973 per sq ft, which is the first time a transaction has been recorded since 2017, and the first time a transaction has been recorded in the past 6 years.

The HKMA's relaxation of the loan-to-value ratio for residential properties of $15 million has indeed alleviated the down payment burden of home buyers. However, under the cloud of interest rate hikes, buyers have become more cautious in entering the market, and some of them have even switched from purchasing to renting, resulting in a rapid depopulation of the rental market. As some developers are now willing to face the reality of price reductions or offer more concessions in order to increase the speed of clearance, the number of first-hand transactions in August is expected to return to the 1,000 level, to about 1,500 cases.