New property measures spur selldown in sector

Property stocks were hammered yesterday on concerns the government's fresh curbs would drag down home prices.

Some analysts expect transactions to fall although the city's property prices may not decline too much because of strong demand.

"We do not expect residential prices to drop - demand is coming from locals and there are very few panic sellers," Morgan Stanley analysts said.

CLSA analyst Nicole Wong said residential prices could not rise more than 3 per cent in any three months without triggering more tightening.

"Property agents such as Midland will be affected badly and investors should stay away. We prefer Hong Kong landlords, in particular Hongkong Land," Wong said.

Among stocks, Swire Properties fell 1.05 per cent to close at HK$28.20, while Sun Hung Kai Properties dropped 1.34 per cent to HK$117.70.

The Hang Seng properties sub-index, which tracks nine major developers, lost 0.32 per cent while the benchmark Hang Seng Index gained 0.17 per cent.