Property slowdown underlined as price cuts fail to clear units

PUBLISHED : Monday, 18 January, 1999, 12:00am
UPDATED : Monday, 18 January, 1999, 12:00am

Forecasts for a first-quarter slowdown in residential-property activity and prices were underlined yesterday when a consortium led by Sino Land sold fewer flats than expected at its Island Harbourview project above the Olympic airport railway station at Tai Kok Tsui.

Sino Land said it had sold 260 of 338 units offered in blocks eight and nine at the project, after 727 applicants registered during a four-day programme ending on Friday .

The response and prices were worse than those achieved by the consortium at the project's launch in November, when more than 1,000 flats were sold on one day after receiving 6,600 registrations.

Agents said yesterday's results confirmed that buying sentiment had faded due to worries over the economy and recent falls in the stock market, while there had also been a sudden increase in new projects on offer.

They said the results also confirmed that a property rebound in last year's fourth quarter had ended. Activity and prices would decline this quarter, the agents predicted.

Centaline Property Agency sales supervisor Nelson Fu Hoi-sen said: 'The market is going to see a minor correction and I predict home prices will drop 3-5 per cent in the first quarter.' Midland Realty sales manager Henry Ho Hon-fai said the failure to dispose of all 338 units on offer could deal a psychological blow to home-seekers in the short-term.

The market's next focus will be Tung Chung Crescent, at the airport railway station, with a sale due on Saturday.

On offer yesterday were 206 two-bedroom units, each of about 600 square foot, which fetched an average price of $4,548 per square foot. Another 132 units, ranging from 900 sq ft to more than 1,000 sq ft, were on offer at an average price of $4,964 per square foot.

Agents said the prices were about 6.5 per cent below those at November's Harbourview sale.

In an attempt to boost sentiment, the Sino Land-led group had tried yesterday to give home-seekers more choice by releasing all standard units, raising the number of units on sale to about 560, agents claimed.

But the move, which was not confirmed by Sino Land, failed to attract more buyers, agents said.

Mr Fu said speculation was weak at yesterday's sale, with only one transaction of purchase rights at $10,000 believed to have taken place.

Last November, more than 400 registered buyers offered their purchase rights, with prices of up to $310,000.

Mr Fu said the market could see a rebound in the second quarter if the proposal to provide mortgages of up to 85 per cent of a property's price was implemented.

Meanwhile, Real Estate Developers Association chairman Stanley Ho Hung-sun said yesterday that home prices had shown signs of stabilising and he predicted capital values would increase 10 per cent by the end of the year.