Secondary home transactions dip

Home sales in the secondary market were subdued last week as buyer attention turned to the prospect of new releases in Hong Kong.

Also contributing to the cautious sentiment in the market, agents said, were concerns from some prospective buyers that policy measures aimed at containing demand and price growth could be unveiled in Chief Executive Donald Tsang Yam-kuen's policy address on October 13.

In the 50 largest housing estates tracked by agency Ricacorp Properties, 269 preliminary sales agreements were signed during September 20 to 26. This represented a 6 per cent drop when compared with 287 deals recorded in the previous week.

But in the primary market, the transaction volume rebounded to 102 flats last weekend, 7.5 times more than the previous weekend. Most transactions were from the launch of a small luxury residential project Gramercy in Mid-Levels, developed by Phoenix Property Investors, Samsung Securities said.

Last weekend's transaction volume was close to the respective average weekend volume of 107 flats recorded three months ago.

Samsung regional head of property Lee Wee Liat said sales in the primary market were likely to remain active in the week ahead as he expected developers to take advantage of the National Day 'Golden Week' holiday to attract mainland buyers. Projects to hit the market include Oceanaire in Ma On Shan, developed by Cheung Kong (Holdings); The Valais in Sheung Shui, by Sun Hung Kai Properties; Chinachem Group's Billionaire Royale in Kowloon City; and Queen's Cube in Wan Chai, developed by Nan Fung Development and the Urban Renewal Authority.

'Together with the pent-up demand from local buyers, we believe that transaction volume of primary projects will significantly rebound,' Lee said.

But David Ng, regional head of property research at Royal Bank of Scotland, was less optimistic about the outlook. 'Property prices cannot rise indefinitely by repeatedly relying on the arguments of excess liquidity, low interest rates and a shortage of supply. The 15 per cent price growth year to date amplifies the downside risk.'

Ng expects Tsang to announce a resumption of public housing supply during next month's policy speech.