Secondary transactions drop 25pc as buyers resist high prices
Property sales plunged 25 per cent in Hong Kong's secondary market last week as home buyers baulked at increased prices.
The number of transactions fell to 603 for the week from 803 deals in the previous week, versus peak sales of 871 deals achieved during the year.
Property agents said while rising prices had kept buyers sidelined, many sellers still expected prices to rise further and were withholding their flats from the market, with the result that the number of units offered for sale was also down.
The sales data is provided by Ricacorp Properties which monitors transactions in 50 key housing estates in Hong Kong.
Transactions in some popular housing estates dropped significantly, with Taikoo Shing falling 50 per cent to just 19 deals for the week, and South Horizons in Ap Lei Chau down 46 per cent to 14 deals.
In a survey by Midland Realty, secondary home transactions at 35 key housing estates fell 4.3 per cent to 465 during the week ended Sunday.
The fall in sales followed a big jump in prices. Fredy Wu Yat-fat, chief executive of Hong Kong Property, said home prices surged by 8 to 10 per cent over the period from mid-October to mid-November.
In Taikoo Shing - where sales were sharply lower last week - prices had risen by more than 10 per cent.
'Some buyers have become more cautious. But on the seller side, they do not want to sell as they believe home prices will continue to grow,' he said.
David Chan Tai-wai, sales director at Ricacorp Properties, added that the fluctuating fortunes of the stock market had also adversely affected homeseekers' property-buying decisions.
He expected transaction volumes in the secondary market would continue at around 600 deals a week.
'We will see a new buying spree, however, if the US decides to cut interest rates next month and Hong Kong follows suit,' he said. Hong Kong Property's Mr Wu expects home purchases will jump after the Lunar New Year, which is the traditional peak period in the housing sector.
Last week, Midland Realty said home transactions by confirmors increased 47 per cent to 159 deals in the first 22 days of the month when compared with the same period last month.
Confirmors are investors who buy a property and resell it before the transaction is completed.