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Love Ocean Song has become a "loss camp"
Sham Shui PoLove Sea SongThis semi-new property has recorded about 5 transactions so far this month, but all of them were sold at a loss. Take one of the two-bedroom units as an example. It is located on the middle floor of Block 1, Room A, with a saleable area of 496 square feet. It has two bedrooms and one bathroom and enjoys southwest city views. It was recently sold for HK$6.7 million, with a price per square foot of only HK$13,508. Looking back, the original owner bought the property for 9.039 million yuan in March 2020 and held it for 5 years. Now he has lost a lot of money when he resold it.2.339 millionYuan, a depreciation of as much as 26%. This is not only a loss in numbers, but also a ruthless trampling on investment confidence.
Look againLand Registry Information, another 4 transactions this month were equally disappointing, all of which were 2-bedroom units, with transaction prices ranging from HK$6.8 million to HK$7.28 million, and prices per square foot ranging from HK$13,498 to HK$14,918, but none of them escaped the fate of losing money. Among them, the room with the largest loss is Room C on the 19th floor of Building 5. The original owner bought it for 9.231 million yuan in November 2020 and recently sold it for 6.8 million yuan, with a book loss of 2.431 million yuan and a depreciation of 27%. Behind this series of numbers, there seems to be a cruel truth: the owners of Ai Hai Song are collectively trapped in a nightmare of "wealth evaporation". Is it that the market is ruthless, or is it that we were too optimistic when we entered the market at a high price? This property market storm has obviously cast a shadow over Sham Shui Po, a "paradise for the common people".
Four major drivers of erosion
High entry and price adjustment
The owner in this case purchased the unit for RMB 9.039 million in March 2020. At that time, it was the early stage of the epidemic. Global quantitative easing policies pushed up asset prices, and the pricing of first-hand properties was generally high. However, with the start of the interest rate hike cycle from 2022 (Hong Kong's prime rate will rise from 5% to 6.5%), coupled with the sluggish economic recovery, prices in the second-hand market have fallen significantly, and losses have become inevitable.
The “reality gap” of semi-new properties
Ai Hai Song, which has been in operation for less than four years, is a semi-new property and should theoretically be resistant to price declines. However, after moving in, some buyers found that the actual living experience (such as obstructed view and traffic noise) did not match their expectations during the sales period, which affected their confidence in resale. At the same time, the increase in new housing supply weakens its uniqueness and intensifies market competition.
Rising holding costs
Holding the product for 5 yearsAdditional stamp duty(SSD) restrictions, but during this period mortgage rates soared and the burden of mortgage payments increased. For investors, the rental returns are difficult to offset the capital costs (estimated based on the case unit, the monthly rent is about HK$18,000, and the rate of return is only 3.2%), prompting some owners to choose to stop loss and leave.
Regional supply pressure
In recent years, there have been many new housing projects in Sham Shui Po and West Kowloon (such as Victoria Harbour, The Harbour and The Coast), with an average annual supply of about 20,000 units, which has diluted market demand. As a second-hand property, Aeihaisong needs to compete with low prices to further push down the transaction price.
The enlightenment of 26% depreciation
Transaction Details
Room A on the middle floor of Block 1 of Ocean View has a saleable area of 496 square feet, two bedrooms and one bathroom, faces southwest and overlooks the city view. It was sold for HK$6.7 million, with a saleable price per square foot of HK$13,508. The original owner purchased the property for RMB 9.039 million in 2020 and held it for five years, resulting in a book loss of RMB 2.339 million and a depreciation of RMB 26%.
Price Analysis
Low price per square footThe price per square foot of HK$13,508 is lower than the average price per square foot of Ocean Avenue this month ($14,654), and is much lower than the first-hand new properties in the same district (the price per square foot of new properties in Cheung Sha Wan is about HK$18,000 to HK$20,000), indicating that the market valuation of semi-new properties is becoming more conservative.
Lack of competitiveness of housing types: The 496-square-foot two-bedroom unit is awkwardly positioned in the current market - small units (nano buildings below 300 feet) are favored by investors, large units (three bedrooms) are more suitable for owner-occupied families, and medium-sized units have limited liquidity.
Owner decision-making changes
The belief that the Hong Kong property market "can only rise and never fall" has been shaken. Investors are no longer waiting for a rebound and are accepting losses instead. Funds are flowing into the stock market or overseas properties, accelerating losses in transactions.
The dream of buying a house is shattered, and the bloody lesson of the love sea song
Who hasn’t dreamed of owning a property? Who hasn’t dreamed of buying a property to increase its value and sit firmly on the wealth train? However, the reality of Sham Shui Po's Ode to the Sea is like a basin of ice water, waking up everyone who is still dreaming. Buying two houses for 6.7 million, losing 2.33 million after 5 years. This is not just a simple "market adjustment", this is a cliff-like collapse of wealth! Not to mention the maximum loss of 2.431 million, which was almost a luxury car and several years' savings of a middle-class family, all of which were wiped out in the torrent of the real estate market. Do you still dare to say that buying a property is a sure win? Do you still dare to believe the myth that "bricks will always appreciate in value"?
Future Outlook
- Short-term pressure is difficult to reduce
The expectation of US interest rate cut has been postponed to the second half of 2025. The cost of capital in Hong Kong is high. Coupled with the continued supply of new projects (18,000 units are expected to be completed in 2025-2026), the prices of semi-new projects will still be under pressure, and the loss-making trend may continue. - Investment and property advice
Avoid the premium trap: If the pricing of a new property overdraws the regional potential (such as the positive impact of infrastructure has been reflected), you should be cautious when purchasing.
Focus on cash flow: Units with rental returns below 3.5% have weak resistance to price declines. It is recommended to give priority to small and medium-sized units with high rental demand.
Policy variables：If the government relaxes its "tough measures" in the property market (such as reducing or exempting the double stamp duty), it may stimulate transactions in the short term, but it may also increase the tendency of owners to sell their properties, exacerbating price fluctuations. - Buyer's Perspective
- Chance：Loss-profit properties provide a window for “bottom fishing”, especially for owner-occupiers, but attention needs to be paid to the quality of the properties and the potential diversion effect of new developments such as the northern metropolitan area on West Kowloon.
- risk: A low price per square foot does not necessarily mean value. If a unit is discounted due to a low floor, poor view or aging decoration, it needs to be carefully evaluated.
The new normal of the real estate market in adjustment
The eclipse of "Ode to the Sea" reflects the structural changes in Hong Kong's property market: rising interest rates, oversupply and weakening market confidence are intertwined, breaking the inertia of past unilateral rises. For investors, it is time to shift to a cash flow and long-term holding mindset; for owner-occupiers, it is a good time to screen for quality units. Whether buying or selling, accurate judgment of regional value and unit conditions will ensure steady victory amid fluctuations.
Introduction to Love Sea Song
Love Sea SongSeaside SonataHongkongKowloonSham Shui PoHaitan StreetNo. 201, 203 and 218, adjacentSham Shui Po Police StationandTung Chau Street Park,yesCheung KongandUrban Renewal AuthorityA private residential estate developed through cooperative development. The property consists of 4 buildings (Blocks 1, 2, 3 and 5) with 32 to 40 storeys high, providing a total of 876 units. The primary school net is Block 40 and the secondary school net is Sham Shui Po District. It was launched for sale in October 2019. The price list for the first batch of 180 units has an average discounted price of HK$18,688 per square foot. The property will be occupied in phases until July 2021.
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