Hong Kong primary house sales strong while secondary market lags

Hong Kong's housing market continues to experience strong primary sales in contrast to a slowing secondary market.

As developers rush to sell their flats by offering price discounts and incentives, secondary homeowners continue to stand in an unfavourable position when they compete with developers, according to analysts.

In the primary market, 240 units were sold over the weekend of November 8 to 9, against the 105 units sold in the previous weekend. A total of 210 units were from Dragons Range in Kau To Shan, a property jointly developed by Kerry Properties and Sino Land.

In contrast, 13 units were sold at the 10 largest residential estates tracked by Centaline over the period.

Hong Kong Property Services (Agency) senior executive director Jeffrey Ng Chong-yip said secondary home sales will remain slow-moving in a narrow range, given the flood of primary units being launched in the market.

"The primary market so far represents 40 per cent of overall home sales as compared to 31 per cent on average from 2003 to 2013," said Jefferies in a recently released report.

As the large developers are major price setters, given the focus on volume, generous pricing and undercutting of used homes should continue to appeal to buyers, said Jefferies. That implies secondary homeowners are mostly in an unfavourable position when they compete with developers for property sales which skew toward the mass end, it said.