Tseung Kwan O Metro City Phase II suffered a loss of $1.25 million

Midland Realty branch senior regional sales manager Lam Kin Wai said that they had recently successfully facilitated the transaction of Unit F on the lower floor of Block 10, Phase 2 of Metro City in Tseung Kwan O. The unit has a usable area of approximately 363 square feet, a two-bedroom layout, and faces southeast. It was originally listed for about one and a half months at HK$5.1 million, and was eventually taken over by a local user at HK$4.75 million, with a usable price of approximately HK$13,085 per square foot. It is understood that the original owner purchased the property for 6 million yuan in February 2019. The book loss of this transfer was about 1.25 million yuan, and the unit depreciated by about 20.8% during the period.

In addition, according to the Land Registry, the latest transaction in the estate was Room B on the lower-middle floor of Block 4, Phase 2, with a usable area of 656 square feet, which was sold for HK$7.45 million, with a usable price of approximately HK$11,357 per square foot. This transaction further reflects the market demand for the housing estate. Although some units have seen price adjustments, the overall market remains active.

A landmark eclipse event in the cold market

Recently, a major loss was seen in the second phase of Metro City, a landmark housing estate in Tseung Kwan O, sparking heated discussions in the market. Midland Realty branch senior regional sales manager Lam Kin Wai exclusively disclosed to this magazine that the notable transaction involved Room F on the lower floor of Block 10, Phase 2, a two-bedroom unit with a saleable area of 363 square feet. The original owner purchased it for HK$6 million at the peak of the property market in February 2019. After a holding period of 52 months, it was eventually sold for HK$4.75 million, with a book loss of HK$1.25 million, a drop of 20.8%, equivalent to a monthly evaporation of HK$24,000 in asset value. This case not only set the record for the largest single loss in the housing estate in the past three years, but is also regarded as an important signal reflecting the structural adjustment of the property market in the post-epidemic era.

Cross-analysis of case details and market data

The unit is located on the lower floor facing southeast, with a saleable price of HK$13,085 per square foot, which is approximately HK$15% lower than the market price of a similar mid-level unit. It is worth noting that during the same period, the Land Registry recorded the transaction of Room B on the lower and mid-level floors of Block 4 of Phase 2. The unit with a usable area of 656 square feet was sold for HK$7.45 million, with an actual price of HK$11,357 per square foot. The two transactions are in sharp contrast: the former reflects the pressure on the small-sized apartment market, while the latter shows that the demand for medium and large-sized apartments is relatively strong. According to data from Centaline Property Research Department, the transaction volume of New Metro City this month fell by 28% compared with the same period last year, but the transaction proportion of units larger than 600 square feet rose against the market trend to 35%, indicating a special phenomenon in the market where "demand for house-changing squeezes the first-time home buyer market."

Overview of historical context and regional development

Founded in 1996, Metro City, as Henderson Land Development’s benchmark project at Po Lam Station, has witnessed the complete development process of Tseung Kwan O New Town. This super-large housing estate, developed in three phases, has a total of 6,768 units. The first phase was launched before the 1997 financial crisis. Its pricing strategy and sales performance were once regarded as a barometer of the Hong Kong property market. The current level of supporting facilities in the housing estate is the most mature in the same area. The base shopping mall MCP Central covers an area of over 500,000 square feet, connecting the MTR Po Lam Station and the large bus terminal, forming a model of a "five-minute living circle".

Analysis of the multi-dimensional causes of market adjustments

1. Interest rate cycle shock: According to the latest data from the HKMA, Hong Kong's prime rate has increased by 3.25% since 2022, directly resulting in an increase of more than 23% in the monthly loan of 4 million, which has seriously weakened the purchasing power of car buyers.
2. Supply surge: The Rating and Valuation Department report shows that more than 8,000 new units will be put on the market in Tseung Kwan O in the next three years, forming a direct competition between existing housing and new projects
3. Cross-border substitution effect: Centaline Property Research pointed out that after the full customs clearance, about 15% of buyers who originally planned to buy properties in Hong Kong will switch to the Greater Bay Area real estate market.
4. Policy sequelae: The SSD binding period and the market reversal have a combined effect, forcing some property owners to "cut their losses"

In-depth interviews with professionals

1. Brokerage practical perspective:
   Lin Jianwei analyzed, "The units sold at a loss this time are low-rise and street-facing, and the purchase price in 2019 included the developer's second mortgage discount of about 8% at the time, so the actual financial cost is higher. The current market's sensitivity to landscape and floor level has increased by more than 30% compared to the peak period, and high-quality units are obviously more resilient to price drops."
2. Economist's macro interpretation:
   Professor Ho Lok-sang of the Department of Economics at Lingnan University said: "This case reflects that Hong Kong properties have entered a stage of revaluation. The abnormal pricing model of 'the smaller the more expensive' in the past is being corrected. It is expected that in the next 18 months, small and medium-sized units priced between HK$3 million and HK$5 million will face the greatest adjustment pressure."
3. Surveyor professional assessment:
   Chow Wing-hang, director of valuation at Jones Lang LaSalle, said: "Based on the current reconstruction cost, the reasonable valuation of Metro City units should be in the range of HK$11,000-13,000 per square foot. The transaction price this time is close to the cost price, indicating that the market has entered a bottoming stage."

Comparison and alternative selection in the same area

Comparing the performance of new housing estates in Tseung Kwan O South, the recent transaction price per square foot of MONTEREY has remained stable at HK$14,500, while the price per square foot of Metro City Phase III has remained at HK$12,800. Veteran investor Chen shared: "There is a phenomenon of 'ten-year-old building discount' in the area. Housing estates completed around 2000 generally have a price discount of 15-20%, forming a unique ladder-type market structure."

Stock holding strategy and financial planning advice

1. Stress test new normal: Based on the current H-rated interest rate cap of 4.125%, buyers should perform stress test based on the current loan amount of 130%
2. Cross-cycle holding strategy: Owners of medium and large units can consider the transition of "renting instead of selling". According to the Midland Rental Index, the current monthly rent of a two-bedroom apartment in Metro City is about HK$13,500, with a rental return rate of about 3.4%
3. Tips for adding value to your decoration: Senior interior designer Huang Guoqiang suggests: "Low-floor units can turn their floor disadvantages into unique selling points by using soundproof glass and vertical greening design."

Future trend forecast and risk warning

Based on the analysis of many major banks, the market shows three major trends:

1. Dual-track pricing: The price difference between high-quality households and ordinary households will be expanded from the current 20% to 30%
2. Changes in transaction structure: The first-time homebuyer ratio is expected to drop from 65% to 50%, and it will take time for the chain of house exchange to start
3. Interest rate sensitivity: If the US interest rate is lowered in the second half of 2024, Hong Kong real estate is expected to bottom out and rebound in early 2025

Comparative study of historical cases

Looking back at the major adjustment periods in the past twenty years, Metro City recorded a low of HK$1,800 per square foot during the SARS period in 2003, and a drop of HK$18% during the property market adjustment period in 2016. This adjustment has surpassed the performance during the 2018-2019 trade war in terms of duration and depth of decline, but it is still milder than the cumulative decline of 65% from 1997 to 2003.

A practical guide for homebuyers

1. Bargaining strategy: For units held for more than 5 years, the price can be quoted based on the original transaction price at the Land Registry plus the compound annual growth rate of 3%.
2. Key points for legal review: Pay special attention to whether the units purchased around 2019 involve the developer’s second mortgage or breathing plan clauses
3. Financial planning: Take advantage of the "home loan interest deduction" tax benefit, which can reduce your taxable income by up to HK$100,000

Conclusion

The HK$1.25 million loss incident that occurred in New Town is actually a microcosm of the structural adjustment of Hong Kong's property market. Under the dual pressures of interest rate normalization and continued increase in supply, the market is undergoing a profound transformation from the "era of general increases" to the "era of value investment." For prospective buyers, the current market is full of challenges but also contains hidden opportunities. The key lies in accurately grasping the balance between individual property value and long-term planning. As a senior analyst said: "The best time to enter the market is always based on a deep understanding of the value of the case."

New MetropolisLocated at 1 Wan Heng Road, Po Lam (Midland District), Kowloon, it was developed by the well-known developer Henderson Land Development and officially completed in December 1996. The housing estate is divided into three phases, consisting of 21 buildings and providing 6,768 residential units. As a landmark residential project in the Baolin District, Metro City is well-known for its complete community facilities and convenient transportation network, and is deeply favored by residents.