Chung Yuan: The number of transactions of both new and second-hand private residential buildings in Hong Kong priced below 4 million Hong Kong dollars has exceeded 12,600 in the first 11 months of this year, hitting a 9-year high.

Following the Hong Kong SAR government's increase of the stamp duty threshold to HK$1 million in the 2025 fiscal budget, demand for small and medium-sized apartments surged in real time, leading to a rapid heating up of the market and driving the transaction volume of properties below HK$4 million to a nine-year high. Stanley Chan, Vice Chairman and President of the Residential Department of Central China Real Estate Asia Pacific, stated that in the first 11 months of this year, there were a total of 12,620 transactions of first and second-hand private apartments below HK$4 million, an increase of about 20% from the total of 10,480 transactions in the previous year. This marked the second consecutive year of surpassing 10,000 transactions, accounting for approximately 24% of the overall transactions, the highest since 2016, and more than double the rebound from the low point of 3,949 transactions in 2020. Compared to the peak years of the property market from 2019 to 2021 when such properties accounted for less than 10%, and dropped to 6.9% in 2021, the proportion of small and medium-sized apartments increased from just over 10% in 2022 to 24% this year, reflecting a significant recovery in demand for these properties. In the primary market, developers actively launched new projects targeting the demand for small and medium-sized apartments due to the impact of the stamp duty reduction to HK$1 million. There were a total of 17,545 primary market transactions this year, with 1,873 transactions falling below HK$4 million, marking a four-year consecutive increase and a sharp increase of about 65% year-on-year. Upper River North in Tai Po recorded the highest number of transactions below HK$4 million with 487 transactions, followed by Golden Bay in Tuen Mun with 318 transactions, Langtin Peak in Yuen Long with 212 transactions, and 156 transactions in Sierra Sea in Sai Sha. In the secondary market, there were 33,753 transactions this year, with 10,747 transactions below HK$4 million, accounting for approximately 31% and a 15% increase compared to the previous year. The 46-year-old Tsuen Wan Center once again became a "paradise for homebuyers," with 142 out of the total of 151 transactions falling below HK$4 million, accounting for 94% and an average price per square foot of about HK$9,300. The trading activity in Jat's Terrace was also active, with 425 transactions throughout the year, including 118 transactions below HK$4 million; transactions in River Park in Sha Tin, Garden City and Tsuen Wan Garden were all below HK$4 million. In terms of regional distribution, So Kwun Wat recorded the highest number of transactions for small and medium-sized apartments in the primary market with 502 transactions, followed by Tai Po Market with 487 transactions and Southeast Yuen Long with 231 transactions; in the secondary market, Sham Shui Po led the way in Hong Kong with 556 transactions, followed by Central Yuen Long with 429 transactions and To Kwa Wan with 426 transactions. Stanley Chan pointed out that properties below HK$4 million only need to pay HK$100 in stamp duty, coupled with the two interest rate cuts by banks earlier this year, many residential complexes now have rental yields higher than the 3.25% level of interest payments, creating a clear incentive for leasing. Among the 143 residential complexes covered by the Central China Leadership Index (CCL), 108 of them belong to this category, accounting for about 75%. The trend of the properties continues to be strong this year, with ratings department data showing a cumulative increase of 1.8% in small and medium-sized units in Class A to C in the first 10 months, far surpassing the 0.9% increase in large units, further highlighting small and medium-sized apartments as the most sought-after sector in the current market. He estimated that the total number of transactions below HK$4 million for the year is expected to reach 13,000, marking the highest in 11 years since the peak of 18,378 transactions in 2014.