Sales of new homes surge as developers cut prices

PUBLISHED : Wednesday, 30 November, 2011, 12:00am
UPDATED : Wednesday, 30 November, 2011, 12:00am

Sales of new homes surged to 390 at the weekend, from 75 the previous weekend, as developers rushed to sell. Some flats sold for less than comparable second-hand homes.

'Developers are going all out to churn out sales via price cuts or raising agents' commissions,' said Lee Wee Liat, regional head of property research at Samsung Securities (Asia). 'The good news is that potential buyers are responding positively.'

For instance, Cheung Kong launched the sale of 281 flats at Festival City III in Tai Wai in the New Territories at average prices of HK$8,100 per square foot for cash buyers - 3 per cent less than second-hand flats at Festival City I and II sold for. The developer sold 170 flats.

Lee expects that home prices will continue to fall.

His view was supported by Centaline Property Agency.

Last week prices in the secondary market fell 0.21 per cent from the prior week, according to Centaline's housing index. Average prices in Kowloon and the western New Territories rose by 1.97 per cent and 0.42 per cent week on week respectively, while those on Hong Kong Island and in the eastern New Territories fell by 2.32 per cent and 0.32 per cent week on week respectively. It was the seventh week in a row that average prices on Hong Kong Island had declined.

'Home prices have seen a correction in the second half of this year, hit by the volatile stock market, banks' moves to increase mortgage rates and administrative policy controls by the government,' said Wong Leung-sing, an associate research director at the agency.

He too expects that home prices will continue to fall.

In the secondary market, only six properties sold at the 10 largest residential estates tracked by Midland Realty, against eight the previous weekend.

According to data compiled by another agent, Ricacorp Properties, 125 flats on 50 housing estates sold during the week ending November 27, against 124 sold the preceding week.


Amount by which property prices could fall over the next few months, GuocoCapital's Eric Yuen Chi-fung said recently


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