Secondary home deals rise 17pc on lower prices

Home sales have been picking up in the secondary market, with transactions in the week to March 15 rising 17per cent from the previous week.

According to figures compiled by Midland Realty, 184 deals were done at 35 major Hong Kong housing estates over the past week, compared with 157 deals during the week from March 2 to 8.

In a separate survey by Ricacorp Properties, there were 297 second-hand homes sold at 50 housing estates last week. This was a 17.4 per cent increase from the preceding week.

Alva To Yu-hung, DTZ's head of consultancy, North Asia, said yesterday transaction volume had been picking up over recent months as more buyers were attracted by lower prices. 'At the same time, recent sales of new projects gave some boost to market sentiment, making for a better transaction volume in March.'

In some estates, prices have been picking up. For example, the price of a mid-floor flat at Taikoo Shing fell 28.6 per cent to HK$5,500 per square foot in November last year from HK$7,700 in May and rose to HK$5,950 per square foot this month.

Luxury flats also showed a slight gain. Secondary home prices at Hong Kong Parkview saw a modest 3.7 per cent rise to HK$8,500 per square foot last month compared with HK$8,200 per square foot in January.

But Mr To has reservations about the market outlook.

'Although calm has settled over the residential market during the first quarter, it remains to be seen to what extent the economic developments in Hong Kong and external markets affect the local residential market in the short run, as well as the confidence of buyers,' he said.

It was likely that prices might see further downward movement as the recession unfolded this year, he added.