Speculators expected to unload secondary units

Hong Kong Property Services (Agency) says speculators will cut prices to dump flats and that the secondary housing market will suffer most in the downturn.

Managing director Michael Choi Ngai-min yesterday said speculators would race to unload properties because of higher interest rates and new government measures to cool off property prices.

'Speculators signed agreements to snap up flats aggressively in major housing estates early last month,' he said after the opening ceremony of the company's 100th branch in Wan Chai's Hopewell Centre.

They probably needed to complete their purchases either this month or next month, he said.

Mr Choi expected property prices in housing estates with rampant speculation, including Mei Foo Sun Chuen in Lai Chi Kok and South Horizons in Abredeen, to drop 4 to 7 per cent in the second quarter.

He believed speculators in these areas would be desperate to offload their property stocks before they were required to pay the balance of buying considerations.

Average transaction prices in Mei Foo Sun Chuen soared 16 per cent to $5,000 per square foot while South Horizons in Abedeen was up 19 per cent to $7,850 per square foot in the first quarter, Mr Choi said.

The agency, partly owned by Cheung Kong (Holdings), earlier recorded 98 property transactions in Kingswood Villas, Tin Shui Wai.

Mr Choi said property prices in Kingswood Villas, built by Cheung Kong, would be stable.

He said property prices for the first quarter rose 18 to 20 per cent and he expected the whole year's increase would be 27 per cent.

Mr Choi said that, despite an expected market slowdown in coming months, Hong Kong Property Services was planning to expand its network to 200 branches this year.

'We are taking advantage of the soft market for expansion as the rental is relatively lower ' he said.

He said he was still optimistic about the property market since there was no immediate solution to the short supply of flats that the arrival of mainland companies would create more demand.

IN THE DUMPS Interest rates, anti-speculation moves expected to lead to flat dumping Secondary market, such as South Horizons and Mei Foo Sun Chuen, expected to suffer