Hong Kong property sales plunge to 17-month low in August amid increasing economic uncertainty in China

Property sales in Hong Kong last month hit the lowest level in nearly 1-1/2 half years as investors opted for the sidelines amid the ongoing stock market slump and increasing economic uncertainties in China and the rest of world.

Overall property transactions in August fell 29.2 per cent from the previous month to 5,197, the lowest in 17 months. Residential transactions plunged 27.8 per cent to 3,896, according to the Land Registry.

Market analysts said they expected slow sales to prevail for some time, putting home prices under pressure.

This was evident yesterday as major Hong Kong developer, Henderson Land, increased its discount offer from 10 per cent to up to 20 per cent for the latest batch of units at its Mong Kok residential project, High Park Grand.

Other developers have been grappling with the same problem of poor investor appetite, trying a range of mouth-watering incentives, from aggressive second mortgages to deep discounts.

"Property buyers will sit on their hands if the stock markets in Hong Kong and the mainland continue to be volatile," said Alva To, senior managing director of real estate services firm DTZ/Cushman & Wakefield. "Home prices could see a decline of 5 to 10 per cent from current levels."

Prices rose more than 10 per cent in the first half. To said the pressure on home prices means they could grow at a single-digit pace this year.