Sales rise after housing policy announcement
Home sales rebounded significantly last week after confidence was boosted by Chief Executive Donald Tsang Yam-kuen's announcement of a raft of housing measures, but analysts said the bounce was likely to be brief.
'The latest policy measures suggest the government is still supportive of the property sector and highly sensitive to the downside,' noted Samsung Securities' regional head of property Lee Wee Liat in a report.
'The resumption of the Home Ownership Scheme will not occur until the first batch of 2,500 units is ready for pre-sale in 2014 or 2015. We expect some post-policy volume bounce,' the report said.
Secondary transactions in the 50 largest private housing estates monitored by Ricacorp Properties rebounded from their previous week's low, with 140 deals in the week of October 10 to 16. This compares to 120 sales in the previous week, a rise of 11 per cent, and ends four consecutive weeks of declining sales.
The number of housing estates which recorded zero transactions almost halved to seven last week, from 13 a week earlier, Ricacorp said.
In the primary market, 99 units were sold over the weekend, more than the 84 units sold in the previous weekend, Samsung said. About 180 units in Marinella, a luxury project with 411 units developed by K Wah, Sino Land and Nan Fung in Aberdeen, have been sold or reserved by buyers for HK$6 billion since the project was launched last week.
'The fog has been cleared,' Ricacorp director David Chan said. 'Buyers have returned to the market because the measures in the policy address are moderate. Although there are some housing policy changes, Hong Kong people have digested the policy news and doubts about the market are cleared.'
With the stock market no longer falling and policy direction clear, the market outlook will become less uncertain and therefore lure buyers back, said Chan. He believed the increase in sales volumes could be sustained for three to four weeks.
Midland Realty chief analyst Buggle Lau Ka-fai said that despite the rebound in sales, the figures were still low, and it would be some time before sales recovered to normal levels. This was because the government had launched many cooling measures since last year and banks had increased mortgage rates.
Samsung's Lee said some pent-up demand from end-users had triggered a rebound in transaction volume from its ultra-low level. However, some potential buyers still demanded that property owners lower their asking prices by more than 10 per cent. Therefore, weekly secondary transaction volume remained below the 2011 year-to-date level.
'We expect the volume bounce to last for a short period. Ultimately, the external environment is weak and a credit crunch in China is affecting small and medium enterprises and could also weaken mainland demand,' Lee said.
But Lee added that demand was elastic, which meant that if prices dropped 'there are willing buyers waiting to bottom-feed'. He said prices should drop by 10 to 15 per cent from now until the end of 2012.
This is how much average sales prices fell week-on-week from October 3 to 9, according to Centaline's survey of large housing estates