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Sandy Li

Friday's 25-basis-point cut in the prime rate by leading banks has failed to rejuvenate the weakened housing market, with no significant increase in transactions over the weekend, real estate agents say.

 The modest cut was not enough to boost market activity, although it had improved sentiment among nervous home-seekers.

  Centaline Property Agency said there was no significant jump in secondary-market transactions after the cut, and Ricacorp Properties recorded a drop in deals over the weekend.

 Hong Kong's leading banks cut the prime rate to 10 per cent, effective from Monday.

 Agents said market attention had turned to the coming sale of Henderson Land Development's La Cite Noble in Tseung Kwan O and Sino Group's Villa Oceania in Ma On Shan.

 The two primary-market projects had drawn most of the buying interest.

 They expect the sales response to the projects to be the new barometer of the housing sector.

 Reports say the developments attracted 30,000 viewers on the weekend.

 Ricacorp Properties managing director Barry Law Lam-wai said it recorded a 10 per cent drop in transaction volume last weekend, compared with the previous weekend.

 However, its survey of 14 of Hong Kong's largest housing estates showed the number of people viewing flats had jumped 10 to 30 per cent, he said.

 'Most potential home buyers are pending their purchase plans until the sales results of the two major new developments,' he said.

 The rate cut was positive news for the market and would lessen the financial burden slightly on home owners, he said.

 Centaline Property managing director Shih Wing-ching said the rate news had boosted market sentiment, with more people coming out to look for flats.

 It also had helped stabilise property prices hit after the sale of the Canton Road residential site in early March below the expected price.

 Another rate cut was needed to activate the market, he said.

 Residential prices had fallen 7 to 8 per cent last month after a rebound of 10 per cent in February.

 He estimated that Centaline had closed about 1,200 property deals in March, compared with 1,808 deals a month earlier.

 Centaline's commission revenue earned in March would amount to $90 million - down 25 per cent from $120 million a month ago, he said.

 Hong Kong Property Services (Agency) managing director Michael Choi Ngai-min said he expected the secondary market would become active after the coming sale of La Cite Noble and Villa Oceania, which were to take place this weekend or next week.

 A satisfactory sales response in the primary market would encourage other potential home buyers to return to the secondary market, to a certain extent, he said.

 'The rate cut also boosted the confidence of home buyers,' he said.

 However, Mr Choi said owners had resisted pressure to reduce asking prices amid the signs of an easing in interest rates.



Rate cut fails to inspire market