Home sales rebound as buyers return
PROPERTY sales spiked up sharply in March compared with February, but were lower than those for the same month last year.
The Land Registry recorded an 85.7 per cent rise in transactions in March compared with February, though this was about 43 per cent less than volumes registered in March last year.
Fuelled mainly by the revival of home-buying interest, 7,495 sale and purchase agreements were struck.
In February, only 4,035 deals were reported, the lowest transaction level in five years.
The sharp rise in transactions had been expected by the market as home-buyers started to return after the Lunar New Year, and developers put more projects on the market.
Analysts expected to see slower rises in property transactions lodged with the Land Registry in the next two months, with activity likely to be maintained at about 8,000 transactions.
The time lag between the transactions and registrations, usually about four weeks or more, meant that the March figures had not included the strong sales, of more than 2,000 flats, last month.
The two biggest residential sales launched in March were the offer of about 1,070 units at Sun Hung Kai Properties' Royal Ascot project in Sha Tin and the release of 1,396 units at Hutchison Whampoa's The Oasis development project in Ap Lei Chau.
Most of these transactions are expected to be reported in the Land Registry's figures for April.
The total consideration for these agreements was $20.4 billion, which is an increase of 71.6 per cent over February figures, but down 62 per cent compared with the value for March last year.
Despite the rise in transactions, analysts expected that an overall recovery in both sales activity and prices would not come until the second half of this year.
Sun Hung Kai Securities property analyst Keith Yeung said the home sales market would become more active in the next few weeks because buyers believed the market was bottoming out.
But he did not expect to see prices rising because the supply of flats had increased, as well.
'In a bid to achieve sizeable development profits for the coming financial year, many property powerhouses are trying to boost the sales volume by offering prices at below market level,' he said.
'Selling prices are not expected to recover until the rush of developers to sell their developments slows down.' Land Power International managing director Michael Choi said property activity was back to normal and the number of transactions would maintain the 8,000 level in next few months.
He said home prices in the secondary market had rebounded by eight per cent but prices for new flats were not expected to rise until July.
Barings Securities property analyst Nichols Pang said some major developers such as Sun Hung Kai Properties would start to slow their sales programmes because development profits for the coming years were cushioned after the rush of selling apartments last month.
He said developers would change their residential sales strategy when their development earnings were protected and the price war would stop in the second half of the year.
'An overall recovery in both prices and volume may be seen in the third quarter,' he said.
