Secondary home sales in Hong Kong climbed significantly last week after the introduction of a new law on the marketing of primary projects led to a decline in the supply of new flats.
Data from Ricacorp Properties showed that for the week ended May 12, 176 second-hand flats were sold in the 50 largest private housing estates it monitors, up 24 per cent from 142 sales the previous week.
"Under the new ordinance, the market fell short of new project launches, hence the secondary flat market caught attention again," Ricacorp director David Chan said.
"In addition, some owners gradually lowered prices in order to get their flats sold. This boosted buying sentiment and stimulated sales significantly in some popular estates."
The weekly figure is the highest in more than three months since the government introduced more tightening measures to cool soaring home prices in late February.
Midland Realty's sales index, which tracks weekly sales at 35 private housing estates, rose 68.4 per cent to 96 transactions between May 6 and 12, up from 57 sales in the previous week and the highest in 15 weeks.
The activity in the secondary market was in sharp contrast to sales in the primary market, where only two flats in Swire Properties' Dunbar Place in Ho Man Tin sold at the weekend, according to a report from BNP Paribas. Five flats at Dunbar Place sold the previous weekend.
BNP property analyst Patrick Wong Chi-leung said the lack of primary launches turned buyers' focus to the secondary market. Also, more owners were willing to lower their asking prices further to attract buyers, particularly in such estates as City One Shatin and Kingswood Villas.
The latest prices at both estates are about 6 to 8 per cent below prices achieved before the latest round of new measures in February.
"We expect pent-up demand, mainly from first-time buyers, to support the rebound of secondary volume," Chan said.
The Residential Properties (First-hand Sales) Ordinance, aimed at protecting buyers from dishonest sales practices, came into force on April 29.
Analysts said it had affected the launch of new projects as developers needed time to adjust their sales plans and prepare marketing materials that complied with the new regulations.