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Tuesday, October 13, 2015, 08:54

SAR secondary home sales hit 21-month low

By Oswald Chan in Hong Kong
SAR secondary home sales hit 21-month low
Despite a quiet weekend in the city’s secondary market, sales of new apartments have continued to be robust with builders having sold 99 units on last Saturday and Sunday, compared with Oct 3 and 4 when only 39 new units w ere sold, according to market sources. (Xaume Olleros / Bloomberg)

Transactions in Hong Kong’s secondary homes market plummeted to a 21-month low last weekend as first-hand apartments continued to flood the market, while price cuts by owners are deemed not enough to lure potential buyers to the secondary sector.

The city’s 10 major secondary residential estates saw transactions drop to zero over the weekend on last Saturday and Sunday, compared with four transactions registered on Oct 3 and 4, according to Centaline Property Agency — one of the city’s three major real-estate agencies.

Midland Realty — the other key property brokerage firm — recorded a 50-percent drop in residential home sales to just two cases at the 10 major secondary residential estates on last Saturday and Sunday, representing its lowest transaction number since the Spring Festival in February.

“The lack of market confidence after the recent stock market rout, the continued launch of first-hand properties by developers, coupled with the lack of price negotiations with only a limited number of secondary units up for sale, will continue to squeeze transactions in the secondary homes sector,” said Louis Chan Wing-kit, chief executive officer (Residential) Asia Pacific at Centaline.

He expected the number of first-hand homes transactions to reach 1,500 for October.

Sales of new apartments have continued to be robust with builders having sold 99 units last weekend, compared with Oct 3 and 4 when only 39 new units were sold, according to market sources.

Among the latest new projects to go on sale, mid-range developer Profit Share Corporation saw the first batch of 68 home units at its Giovane project in Cheung Sha Wan sold out on last Saturday and Sunday. Sales were boosted as more than half of the units went for below HK$4 million each, with buyers being able to move in within six months of purchase.

Island Residence — Wheelock Properties’ new project in Shau Kei Wan — recorded less than 30 sales transactions from the first batch 100 units on the first day of sales, due to their high prices, compared with Giovane, and buyers having to wait for three years before they can move in.

“I think the local property market has been driven more by the city’s transformation into a major metropolis and financial center than simply the low interest rates since 2001,” said Jonas Kan Kwok-yue, head of HK-mainland property research at Daiwa Capital Markets.

“Positive structural factors will remain in play in the coming years and hence cushion off the sector from adverse external developments, such as cyclical economic adjustments and interest-rate hikes,” he said.

Venant Chaing, an equity analyst at global investment bank Jefferies Group, said: “We expect the homes price pressure to intensify as a result of ample primary supply and the secondary market continuing to be influenced by new projects coming on stream.”

“However, the major risks to property prices are sharp interest-rate hikes and the global economic slowdown,” he warned.

oswald@chinadailyhk.com

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