New home sales in Hong Kong remain buoyant ahead of the Lunar New Year, traditionally a low season, and agents expect the momentum to continue after the holiday break.
"Sales of primary flats have been performing well," said Sammy Po Siu-ming, a director of real estate agency Midland Realty.
"The market froze for about two months after the government introduced cooling measures in October, but we have seen some end-users and long-term investors returning to the market since January, after the policy address, helped by factors including low interest rates, inflationary pressures, and currency depreciation due to the loose monetary policy of the United States."
Po said that after the strong sales performance in January he expected developers to become more aggressive with launches of new flats during the Lunar New Year holiday.
Sun Hung Kai Properties (SHKP) was likely to begin selling its 352-unit Residence 88 project in Yuen Long as early as Tuesday, he said. The flats are sized between 600 and 1,186 sq ft and the market expects the asking price to be about HK$7,000 to HK$7,500 per sq ft, based on gross floor area.
The developer might also launch its 161-unit Imperial Kennedy development in Sai Wan later this month, which is expected to be priced at around HK$30,000 per sq ft. Other developers, such as Emperor International, would also begin selling the flats remaining in their projects during the Lunar New Year, Po added. The new lunar year begins on Sunday.
"Some buyers have even cancelled their holiday travel plans because of the new flats that are expected to start selling," Po said.
About 208 new flats were sold on Saturday and Sunday, down from the 224 units sold the previous weekend, according to a BNP Paribas Securities research report.
Some 100 units were sold in SHKP's The Wings II development in Tseung Kwan O. Henderson Land and New World each sold 52 units in The Reach, their joint development in Yuen Long. Kowloon Development sold 40 units at its Upper West project in Tai Kok Tsui.
"We believe the sales results of most primary launches will remain positive and benefit SHKP most, with two new projects to be launched this month," BNP Paribas property analysts Patrick Wong Chi-leung and Lee Wee Liat said in their report.
Analysts at Macquarie Equities Research said the absence from the chief executive's policy address last month of new measures to curb demand and price growth was a positive for the market. It has pushed up sales volumes and prices in both the primary and secondary markets, they said.
"We expect this momentum to continue into February, causing the Hong Kong government to launch another round of demand-side measures in March when price growth exceeds 2.0 per cent per month.
"Before the launch of new measures, we expect ongoing sales and upcoming new launches to perform well in both price and selling speed," they said.
In the secondary market some 176 homes were sold in the city's 50 largest housing estates during the week that ended February 3.
The sales, tracked by real estate agent Ricacorp Properties, fell 37 per cent week-on-week due to the launch of new flats and a quieter market ahead of the Lunar New Year holiday.
David Chan, a director of Ricacorp, forecast secondary home sales to drop further, to about 120 sales this week, as the market continued to focus on offerings in the first-hand market.