First-hand home sales were slack over the weekend as homebuyers adopted a "wait-and-see" stance after major banks in the city raised mortgage rates.
Some 90 new flats were sold on Saturday and Sunday, mainly at Hong Kong Ferry's Green Code project in Fanling, and The Reach in Yuen Long by Henderson Land and New World Development.
HSBC, Hang Seng and Standard Chartered raised home loan rates by 25 basis points on Wednesday. HSBC lifted its rates from a range of 2.6 to 2.9 per cent to 2.85 to 3.15 per cent.
Just two units were sold in Sung Hung Kai Properties' Residence 88, an upmarket project in Yuen Long; while 20 flats were expected to be sold at other single residential blocks, including Sino Land's The Avery, said Sammy Po, a director at Midland Realty.
As of 7pm last night, 52 Green Code flats were reportedly sold over the weekend. The developer released 216 flats in Tower 5 yesterday, featuring two-bedroom and three-bedroom flats, at prices between HK$4.1 million and HK$6 million. The weekend orders looked set to lift the total number of flats sold in the development to 400.
Thomas Lam, a general sales manager at Henderson Land, said 40 flats were sold in the first 10 minutes. Most of the buyers were end-users.
When the first batch of 396 flats in Towers 1 to 3 were released for sale on March 12 before the banks raised home loan rates, nearly 300 flats - or 76 per cent of the flats on offer - were sold on the first day.
But over the weekend potential buyers seemed to have second thoughts even though developers offered special discounts for first-day buyers, as well as secondary home loans and subsidies on stamp duties.
At Green Code's sales booths, agents outnumbered potential buyers, and some buyers withdrew after long discussions with agents.
Harry Tang, a 28-year-old bank employee, was among those who bought a flat over the weekend. "I have been searching for a flat over the past two years and I did not think prices will fall since supply will not increase that much," he said. "If the prime rate surges to the north of 4 per cent, I will switch to my bank's staff mortgage package to mitigate the impact," he said.
Property agents said the sales of first-hand flats were hampered by the rise in lending rates. But Midland Realty's Sammy Po said as long as America kept interest rates low, buying sentiment would return regardless of the government's cooling measures.