Hong Kong’s property buyers turned out in droves, defying the city’s worst one-day explosion of new Covid-19 cases to snap up apartments at the first new housing project to be launched in 2022.

Henderson Land Development sold all 136 units on offer in the first batch of sales at The Harmonie project in Cheung Sha Wan as of 7pm, according to property agents. The entire project, comprising 337 apartments, is located near the area’s subway station, about a 20-minute ride from the city centre.

The average price of The Harmonie was HK$21,379 (US$2,746) per square foot after discounts, 4 per cent cheaper than The Vertex in the same neighbourhood, launched in December 2019. The cheapest unit on offer was a 322-square foot (30 square metres) unit priced at HK$6.21 million, while the most expensive flat measured 377 sq ft, for HK$8.45 million.

“Buyers are responding well to the new project,” said Sammy Po Siu-ming, chief executive officer of Midland Realty’s residential division, adding that he expects the project to be mostly sold by the end of the day. “The project is welcomed because small homes in Kowloon are not often seen these days and the prices are set at a rather reasonable level.”

The Harmonie development by Henderson Land Development at 233 Castle Peak Road in Cheung Sha Wan, on 14 January 2022.

Sales activity was more sedate elsewhere in Hong Kong, as buyers mostly ignored projects that had been launched earlier.

At Wong Chuk Hang in the southern region of Hong Kong Island, Kerry Properties sold 22 of the 123 flats on offer at the second phase of La Marina, developed with Sino Land and MTR Corporation. In Sheung Wan, Henderson sold only two of the 12 units on offer at its Caine Hill project.

A model of the La Marina apartments, jointly developed by Kerry Properties and Sino Land, at Kerry Centre in Quarry Bay on September 11, 2021.

Home sales have been affected by Hong Kong’s renewed social distancing and lockdown rules to contain the resurgent fifth wave of Covid-19 infections in the city. Local authorities extended the ban on evening dine-in services and incoming flights from several countries for two more weeks through the Lunar New Year. Kindergarten classes are out and many offices have ordered staff to work from home.

That would take January’s home sales to about 600 units, agents said, the lowest monthly performance in a year.

“If the recent breakout can be put under control, more buyers will return after the Lunar New Year,” said Po.

Uncertainties are ahead Hong Kong’s red-hot housing market amid gloomy global economic development and Hong Kong clinging to its zero-Covid policy amid the more transmissible variant.

Some investment banks have predicted that Hong Kong’s home prices could fall this year, with Morgan Stanley expecting a 2 per cent drop, while UBS sees a 5 per cent decline.

Surplus supply would weigh on home prices. As many as 34,000 new units could be available for sale this year, the second-biggest annual supply since 2006, according to Ricacorp Properties.

However, some industry observers are still optimistic in the city’s property outlook. Prices could advance by between 5 per cent and 10 per cent, JPMorgan said, citing cheap borrowing costs that could stimulate demand.

“It would be a huge boost to the market confidence, if The Harmonie was sold out today,” said Louis Chan Wing-kit, Centaline Property Agency’s Asia-Pacific vice-chairman and chief executive of the residential division. “Following the loan rate cut by the Central Bank in China, we see a rebound of the stock market and thus the property market will also benefit.”