Strata sales drop from early peak
STRATA title sales in prime Hong Kong office buildings have dropped dramatically in the past two months.
After a surge in the first six months of the year, particularly in May and June, transactions dipped in July and August.
Property consultants Jones Lang Wootton said the volume of deals dropped by about 35 per cent in recent weeks.
The tightening money supply caused by the Chinese authorities' austerity drive and the traditionally slow summer season were to blame.
But analysts also believed investors were adopting a wait-and-see attitude as the expected upturn approached.
Sam Whiffin, a director at JLW, said there were already signs that the market was picking up again.
''In terms of whole-floor sales, there has been less volume in the past couple of months,'' he said. ''But there is still plenty of activity in the market when it comes to individual units on floors.
''There are now signs once again that there is more activity coming into the strata title market. Prices are still moving up.'' Mainland investment accounted for about half of the deals when the number of sales were at their peak, Mr Whiffin said.
The number was down, but the proportion of Chinese involvement was roughly the same.
Phemey Pon, a director at Collins' surveyors, was worried that in some cases prices had risen too far, too quickly.
A correction in certain developments was a possibility, he said.
''End-users are adopting a wait-and-see attitude,'' he said.
''For two months now it has been quiet, while before that it was very busy.
''We are now waiting to see what happens. A lot of speculators have been involved but the market needs to be supported by end-users.
''We may see a correction, but probably by only a few per cent.'' Sales prices went through the roof in the first half of this year.
A small-unit space in Nine Queen's Road achieved $12,000 per square foot. A floor in the Lippo Tower in Admiralty sold for $9,400 per sq ft.
In Tsim Sha Tsui, the market has also been strong. According to Mr Pon, a space in the Wing On Centre was bought for $8,800 per sq ft. Owners were now asking for $9,000 per sq ft.
Mr Whiffin said: ''The rental market is still also looking good, with prices continuing to rise.
''The yields are reversing upwards quite well.
''Now that the market has had some time to pause for breath, I believe in terms of volume, normal service will be resumed.''