Hong Kong Apartment Bank Valuations Reevaluated

Posted on 20 May, 2021 | By Property852

As covid restrictions continue easing, and the market becomes more bullish, there has been a clear upturn in the secondary-market deals, ultimately causing banks to increase their valuations during this segment.

Of the 20 housing estates indexed, 18 of them have undergone fairly dramatic valuation increases, ranging between 0.6% up to 3.5% month on month, as of their most recent appraisals. Smaller and more moderately-sized estates, such as Quarry Bay's Kornhill or Mong Kok's Metro Harbour View, saw the most growth over larger estates.

The only exceptions to this were City Garden in North Point and Nan Fung Plaza in Tseung Kwan O. The North Point estate remained largely flat in its valuations while Nan Fung Plaza actually saw a notable decline.

The Senior Director of CHFT Advisory and Appraisal, Alex Leung Pui-wang, said that information and data pulled from the Rating and Valuation Department (RVD) determined that this and the following year would be lower than last year when related to the SAR's housing supply. He went on to further state that, as this supply decreased and more people became pressured to purchase property sooner for lower prices (in addition to more relaxed mortgage restrictions from banks) the secondary market would logically gain a predicted boost.

Among the many estates indexed, Metro Harbour View saw the most significant valuation increase. As an example, a unit in tower 6 (around 353-square feet) was valued at a 3.5% increase from its HK$5.99 million last month, now being valued at HK$6.2 million.

The Blue-chip estate, found in Kornhill, also was noted for its impressive rise. In Block E, a 596-square foot unit rose in its valuations by 3% from HK$10.38 million to HK$10.69 million.

In Mei Foo Sunn Chuen, at 22 Broadway Street, a 1,000-square foot unit also had a valuation increase. This time it sat just under 3%, instead, increasing by 2.9% from HK$15.1 million last month to $15.54 million today.

A 391-square foot unit in Amoy Gardens, located in Ngau Tau Kok, increased in value from HK$5.76 million to HK$5.9 million between last month and today.

The estate in Nan Fung Plaza was the only instance of an actual decline. There, the 462-square foot unit fell from HK$7.68 million to HK$7.44 million, plummeting more than 3% month over month.

This may only be something of a temporary situation, thankfully. While it did fall at over 3% last month, the trend for the location is still largely upward, with a 1.5% increase during last month's growth and an even larger increase of 7.8% between the months of February and March.

Willy Liu Wai-keung, chief executive of Ricacorp, noted that, thanks to the recent vaccination program helping ease troubles from the pandemic, the market outlook would only continue to grow stronger with bank valuations likely to become even more aggressive.

Sammy Po Sui-min, Midland Realty's chief executive, believes that many potential buyers are carefully watching the market and that, as traveling becomes more desirable, there should be a fairly significant price rebound in the very near future.

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