Election, prices depress sales
Home sales at major estates in the city dropped to a six-week low last week, with buyers sidelined by rising prices and uncertainty about the outlook for the market under a new administration.
A property consultant forecast luxury home prices will fall by 13 per cent in the next 12 months.
Simon Lo, executive director of research and advisory for Asia at Colliers International, said that, with both the local and global economies still clouded with uncertainties, the government continuing to supply land for homebuilding and mixed sentiment about the incoming administration, 'potential buyers are generally conservative when making their purchase decision'.
That was putting pressure on vendors to reduce their premium asking prices, he said.
The number of sales at the 50 largest private housing estates in the week ended March 25 fell to 300, the lowest since 210 deals were done in the first week of February, and down from the previous week's 362 sales, data from Ricacorp Properties shows.
The drop was partly due to buyer expectations that the winner of Sunday's vote for a new chief executive might introduce policies to make more affordable housing available to buyers on low and middle incomes.
All three candidates entered the election with promises of housing reform. Winner Leung Chun-ying said he would accelerate the construction of 75,000 public housing rental flats and also explore the possibility of allocating some sites for the development of middle-class housing, subject to conditions that the flats could only be sold to Hongkongers.
With the Easter holiday coming up, sales were likely to continue slowing, Ricacorp director David Chan said.
Sammy Po, a director of Midland Realty, attributed the drop in sales largely to the limited number of flats on offer. 'Prospective sellers are unwilling to lower their asking prices and have decided to hold back their flats to bet on a rise in prices later on,' he said.
Ricacorp said average prices had risen 4.5 per cent since January, boosted by record-breaking sales. Last week a 474 sq ft flat in Nan Fung Sun Chuen, Quarry Bay, sold for HK$4.08 million, or HK$8,608 per square foot, a record for the estate.
'Home seekers need more time to digest such sharp increases,' said Ricacorp research chief Patrick Chow, who said such flats were changing hands in late January for between HK$3.3 million andHK$3.5 million.
James Au Yeung, of Centaline Property Agency's West Kowloon branch, said a buyer seeking a 685 sq ft flat at Liberte in Cheung Sha Wan had decided not to proceed until the new chief executive detailed his housing policy.
Still, Au Yeung remains upbeat. 'Home seekers will return to the market within weeks once they see there has been no big change in home prices,' he said.