Sales will slow while prices rise, agent says
After last year's rally, sales of luxury homes in Hong Kong will slow this year, and while prices will continue to rise, they will do so more slowly, says Ricacorp Properties.
Ricacorp director Eric Cheung Wai-man predicted total sales of luxury flats valued at HK$10 million or more would fall 12 per cent to 8,000 this year, but said buyers confident about the luxury market would continue to push prices up. He expected luxury home prices to go up 15 per cent this year, boosted by ample liquidity in the market.
Cheung said the Hong Kong government's determination to cool the real estate market would continue to affect prices.
When it introduced new measures on November 19, the government declared it would take further steps if the measures did not work. The government announced an increase in stamp duty on homes resold within two years and set the duty as high as 15 per cent for homes resold within six months.
The Monetary Authority also reduced the amount banks could lend to buyers of homes worth HK$12 million or more from 60 per cent to 50 per cent of the price. The maximum for properties priced at between HK$8 million and HK$12 million has been cut from 70 to 60 per cent.
In the first 11 months of 2010, the luxury residential market experienced a bull run, with prices rising 23.4 per cent, surpassing the 18.9 per cent growth recorded in the mass housing market, Ricacorp said.
In terms of supply, the agency estimates 4,759 new units will be offered for sale next year, up from 3,404 units in 2010.
Going up
Government policy is causing sales to slow, but prices are forecast to rise this year by: 15%
