Hong Kong home sale volumes in secondary and primary markets moving in opposite directions
Home sales in the secondary and primary residential market in Hong Kong are moving in opposite directions in terms of transaction volumes and more secondary owners are expected to slash asking prices, say industry experts.
Agents say an "Ice Age" has descended on the secondary residential market while developers - who continue to offer an array of incentives to lure buyers - are enjoying encouraging sales.
"The number of weekly transactions in major housing estates has dived below 50 for six consecutive weeks. It is the longest dip in the past 20 years," said Buggle Lau Kar-fai, chief analyst at Midland Realty.
During the week to Sunday, 34 units were sold at 35 estates tracked by Midland Realty, down 10.5 per cent from the 38 sold in the previous week.
He said there was only one week which was just as poor - in 2003 when the city was gripped by the outbreak of severe acute respiratory syndrome.
Zero transactions were recorded at 18 out of 35 housing estates it monitored.
To speed up transactions, some owners in financial trouble have been forced to sell their homes at a loss or reduce their asking prices substantially.
A 2,251 square foot unit at a luxury development, The Graces, in Tai Po changed hands for HK$39 million, compared HK$44.89 million paid by the owner in 2013. Taking into account the 10 per cent special stamp duty if speculators flip homes within three years, the owner will lose nearly HK$10 million - the biggest loss since the stock market crash in July.
In contrast to the sluggish secondary market, home sales in the primary residential market have remained strong.
There were 370 units sold over the weekend of September 12-13, 6 per cent higher than the 349 units sold the previous weekend.
Sun Hung Kai Properties sold all of the second batch of 338 units at the second phase of Century Link in Tung Chung. The developer has sold about 71 per cent of the 932 units at Century Link II over the past two weeks.
"Recent sales of new launches and declining secondary volume suggest buyers are becoming more selective in primary launches and sale progress for primary launches with aggressive pricing will be affected," said Patrick Wong, a property analyst at BNP Paribas Securities (Asia).