According to JLL's Residential Sales Market Monitor released this week, the first day sell-through rates for newly launched mass residential projects (where over 80 units were launched in the first batch of sales) dropped significantly in October 2018.
Figures from JLL research showed that the first day sell-through rates for newly launched mass residential projects averaged out to only 51% in October, compared to an average of 97% in January to September this year.
According to government data released in October, transaction volumes in primary market exceeded those of the secondary market by 23% in September, the first time this had occurred since November 2015 when the housing market temporarily softened.
Henry Mok, Senior Director of Capital Markets at JLL commented, "With an increasing number of buyers adopting a wait-and-see attitude, developers have softened asking prices to offload stocks. As a result, the pressure on sellers to lower prices in the secondary market will only intensify. Furthermore, developers are now also actively trying to capture more demand from the secondary market by offering greater incentives such as loans with higher Loan-To-Value (LTV) ratios up to 80% and aggressive sales strategies like extended payment periods; in some instances allowing the buyer to occupy the unit before final payment."
Cathie Chung, Senior Director of Research at JLL said, "The growing trade tensions between China and the US together with a slowing mainland economy have increased the downside risks for the city's housing market. We expect home prices to fall by 15% in 2019 with sales activity continuing to gravitate towards the primary market."