The COVID-19 outbreak is currently hitting the luxury segment harder than the mass market, affecting those with multiple mortgages and / or deals involving Mainland vendors.

• The COVID-19 outbreak has dampened residential sentiment in general, with super luxury transactions hitting another low in January and February before rebounding in March due to an improvement in sentiment as the outbreak was temporarily contained until the influx of overseas Hong Kongers in mid-March caused another wave of infections.
• The luxury apartment market saw shrinking volumes and lower prices as buyers looked for deep discounts. Some Mainland vendors whose businesses faced cashflow issues and landlords of properties with multiple mortgages were prepared to consider such offers on a selective basis.
• While developers turned cautious and slowed primary launches in the mass market, the projects launched still received a generally positive response with more incentive packages and preferential payment methods embedded without significant price adjustments.
• The economic effects of the COVID-19 pandemic look likely to outlast SARS and the prolonged impact of the virus will continue to undermine the local economy and therefore residential demand. Low interest rates, a lower-than expected level of new completions as well as a possible loosening of some restrictive measures could all help support home prices in the near term, however, with volumes likely to remain low.