Fears over the economic outlook for the United States and Europe may boost the number of secondary homes sold in Hong Kong, as more sellers become willing to cut prices steeply.
'The debt crisis in Europe has worsened and the US credit rating was lowered, which has led to slumps on the global stock markets, residential flat transactions [in Hong Kong] have not been affected,' said Ricacorp director David Chan. 'Due to the crises, sellers are now offering more room for price negotiation, which stimulates transactions.'
According to sales records in the 50 largest private housing estates in Hong Kong tracked by Ricacorp, there were 189 secondary home sales between August 1 and August 7. The figure is up 3 per cent compared with 183 transactions the previous week.
Chan said sellers were now 'breaking the ice by cutting prices by 3 per cent to 5 per cent', ending the deadlock of the past few weeks when owners and potential buyers differed significantly on price. He believes transaction numbers will climb gradually in the next two to three weeks.
An owner of a 1,463-square-foot house at Palm Springs recently sold his property for HK$4.8 million, or HK$3,281 per square foot, about 24 per cent lower than the market price.
Jacky Lung Chi-fung, a senior district director at Centaline Property Agency, said the owner at first cut the price by HK$1 million to HK$5.3 million because it had been difficult to sell the flat as someone had died there in 1998. The owner cut the price by a further HK$500,000 after the outbreak of the European debt crisis, saying it would be more profitable to buy stocks than hold bricks.
