Worried homebuyers stay on sidelines

PUBLISHED : Thursday, 05 July, 2012, 12:00am
UPDATED : Thursday, 05 July, 2012, 12:00am


The euro-zone crisis, volatile markets and slowing mainland growth are taking a toll on the property market in Hong Kong.

As the number and value of property transactions slump to four-month lows, would-be homebuyers are becoming increasingly worried prices are due for a correction.

The Land Registry said yesterday there were 8,389 registered sale-and-purchase agreements for all properties, including apartments, shops and car parking spots, last month, down 27 per cent from May.

The value of the transactions fell 16.7 per cent month-on-month to HK$54.5 billion. Value and number were the lowest since February, when 5,425 units were sold for a total of HK$26.97 billion.

'The figures clearly show that the European debt crisis cast a pall in May over the market, which is hamstrung by growing uncertainty,' said Wong Leung-sing, an associate research director at Centaline Property Agency. 'Global stock markets have been volatile and have dragged down property transactions.'

The market also lost momentum because of growing fears that the new government led by Chief Executive Leung Chun-ying would want to introduce policies that would undermine housing prices to make home ownership more affordable.

Centaline's latest Mass Centa-City Leading Index, which tracks average selling prices at 86 large housing estates across the city, rose to an all-time high of 104.6 points in the week to June 24, well over the October 1997 peak of 102.93. Home prices have risen more than 8 per cent since January, Centaline said.

Primary and secondary market transactions fell 29.5 per cent to 5,886 last month from 8,349 in May, Centaline's data showed. The value of units sold was HK$34 billion, down 28 per cent from HK$47.35 billion in May.

Midland Realty said the number of secondary market sales fell below 100 for six consecutive weeks. Sales in the 35 largest private housing estates the firm monitors rebounded to 95 flats in the week to July 1 from 85 units the week before.