Transactions in the secondary market dropped significantly last weekend as homebuyers' attention had been drawn to the Capitol, which launched units for sale on Friday. A total of 373 units changed hands in the 50 key housing estates monitored by Ricacorp Properties, 13.1 per cent fewer week on week. The average transaction prices edged up 0.9 per cent from last week, extending record gains to a 28th consecutive week. Industry watchers said the government's waiving of property rates of up to HK$5,000 per quarter next financial year had little impact on the market, as the amount waived is minimal. Nevertheless, demand for housing is very strong amid low interest rates and a buoyant economy, as the sales at Capitol showed. On Friday and Saturday, Cheung Kong (Holdings) sold almost 2,000 of the 2,096 units in the Tseung Kwan O project at HK$5,100 to HK$5,200 per square foot, allowing the firm to reap almost HK$10 billion from the sales. The overwhelming response compared to the launch of Park Island Oceancrest in 2002, when Sun Hung Kai Properties sold all 2,000 units in the development in one day. But developers slowed sales in recent years by offering a limited number of units for sale in several phases in anticipation of the tight supply ahead. Analysts believe the quick selling may be due to fear of an oversupply. 'Cheung Kong usually sells its project in phases and tunes up prices gradually, but they now sold almost all units in one batch and priced them at similar levels to the secondary market, implying they may be cautious about the outlook,' an analyst at an American investment bank said. He believes a quick sale may relieve pressure that Cheung Kong faces, as it owns the development rights for the second and third phases of Lohas Park which offer an additional 3,700 units. Cheung Kong also owns Area 85, a plot opposite Lohas Park that is pending settlement of land premiums and could be turned into a residential-commercial project with a gross floor area of about 1.6 million sq ft. 'Cheung Kong needs to boost its sales or prices in the district will be dragged down by oversupply, just like in Tung Chung, where ample supply dampened prices,' the analyst said. Meanwhile, as MTR Corp got a larger share of profits from property sales, Cheung Kong was eager to sell the units even at a low premium to the secondary market to generate cash for future developments, said JP Morgan analyst Raymond Ngai. Reports say nearly 40 per cent of the buyers purchased their flats through construction phase payment terms, compared with about 20 per cent in general, implying speculators could be at play, analysts said. Under the terms, buyers only need to settle 20 per cent of the price in four instalments until the issuance of occupation permits - expected to be in the second quarter of 2009 - but housing prices are 5 per cent higher than the normal terms that require buyers to settle the deal within 1? months. Property agents said about 120 units of the Capitol were available in the secondary market at prices 10 to 15 per cent higher.