Sales drop 12pc on rate concerns

PUBLISHED : Wednesday, 23 September, 2009, 12:00am
UPDATED : Wednesday, 23 September, 2009, 12:00am

The number of sales recorded at key private housing estates dropped 12 per cent last week and agents said this was because of concerns that banks might be poised to raise mortgage rates.

A total of 390 deals were done from September 14 to 20 in the 50 major housing estates monitored by Ricacorp Properties, compared with 444 deals a week earlier.

The average price at which the units were sold was down 0.5 per cent on the previous week, reversing an eight-week continuous growth in prices.

Sales in Kowloon housing estates suffered the most, falling 24 per cent on the week.

There were only 154 deals done in the 20 Kowloon housing estates monitored by Ricacorp.

David Chan, a director at Ricacorp, believed the fall in property transactions and prices was because of the warning issued by the Hong Kong Monetary Authority that banks were charging unreasonably low mortgage rates.

'Potential buyers were sidelined because of worries that the banks may raise mortgage rates in the short term,' Chan said.

However, some flat owners would respond by cutting their asking prices to sell their units as soon as possible, he added.

'They will be concerned that sales may drop further once banks do raise their mortgage rates and this may force them to cut prices further,' he said.

The result was that property sales were likely to stay at current levels this week, Chan said.

In the primary market, Celestial Heights in Ma Tau Wai has replaced the Masterpiece in Tsim Sha Tsui to lead the weekend sales chart.

The luxury project has sold about 70 units at an average of about HK$14,000 per square foot since it launched last Thursday, generating about HK$1.5 billion for the developer, Cheung Kong (Holdings).

Property agents estimated that 50 units were sold during the weekend.