Home sales rebound runs out of steam

PUBLISHED : Wednesday, 27 July, 2011, 12:00am
UPDATED : Wednesday, 27 July, 2011, 12:00am


A rebound in the secondary market's home sales ran out of steam last week, on an absence of positive factors to entice more buyers to enter the market, according to real estate agency Ricacorp Properties.

Data on sales and purchase agreements compiled by Ricacorp from transactions in the 50 biggest private housing estates in Hong Kong show 179 deals were completed in the July 18-24 period, representing a decline of 8 per cent from 195 sales the previous week.

'Property market sentiment had improved in the middle of this month, but there were insufficient positive factors last week, and therefore the sales rebound could not be sustained,' said Ricacorp director David Chan.

The decline came after secondary flat sales climbed for two consecutive weeks from a near six-year low of just 146 sales three weeks ago. The low point in transaction volumes came after the government announced its latest round of measures, including mortgage loans restrictions, to cool the property market.

Flat sales on Hong Kong Island remained low with only 19 homes sold in nine housing estates during the July 18-24 period, down 17 per cent from 23 transactions in the previous week. In most of these estates, including Kornhill and Nan Fung Sun Chuen in Quarry Bay and Grand Promenade in Sai Wan Ho, just one transaction was completed.

There were also fewer transactions in the New Territories, where 114 sales were recorded, down 16 per cent from the previous week's 96 sales, the data showed. Sales on the Kowloon peninsula rebounded slightly from 58 to 64 deals.

'The market is weak, but it is becoming more stable,' Chan noted. 'Fewer flat owners are willing to cut prices while not many prospective buyers are willing to offer matching prices. And while this resistance remains, it is difficult for sales' volumes to keep surging.'

However, in the 35 housing estates monitored by estate agency Midland Realty during the July 18-24 period, transactions were up 16.7 per cent, from 108 to 126.

But despite that rebound, the sales volume was still 25 per cent lower than it was before the government announced cooling measures, Midland Realty's chief analyst Buggle Lau Ka-fai said.

By contrast, the primary market improved significantly. A report by Samsung Securities analysts Lee Wee Liat and Patrick Wong Chi-leung said 142 primary flats were sold over the weekend, up significantly from 62 units sold the previous weekend.

About 92 per cent of the transactions were from Sun Hung Kai Properties' Imperial Cullinan project in West Kowloon. 'The strong sales at Imperial Cullinan may absorb some purchasing power of luxury units in the market,' the analysts said.