Zero transactions in Hong Kong’s secondary housing market over the weekend

Home sales in the secondary market in Hong Kong fell to its worst in 21 months with Centaline Property Agency reporting zero transactions at the 10 selected major housing estates during the two-day weekend between October 10 and October 11.

This is the worst in 21 months, said Centaline Property Agency, one of the two leading property agents in Hong Kong, with a market share of secondary home transactions of more than 40 per cent.

The last time the agent recorded zero transaction was February 1 to February 2, 2014, it said.

Buyers’ confidence has not yet recovered and some of the buyers were attracted to the primary market as developers offered incentives to speed up sales, said Louis Chan Wing-kit, managing director of Centaline’s residential department.

The major housing estates tracked by Centaline are Taikoo Shing, Kornhill and South Horizons on Hong Kong island. In Kowloon, the selected estates are Mei Foo Sun Chuen , Laguna City Whampoa Garden and Metro City in Kowloon. They also include City One Sha Tin, Kingswood Villa and Caribbean Coast in the New Territories.

A similar picture was seen in the sales result recorded by another major agent, Midland Realty. Only two transactions were recorded in 10 housing estates tracked by the agent, the lowest since February 21 and 22 this year.

Sammy Po, chief executive of Midland’s residential department, expects the secondary market will continue to slow.

“Most of the sellers are willing to cut asking prices by three to five per cent, but buyers expect to see a cut of 10 per cent or even more before they agree to sign the deals,” said Po. The price gap has resulted in the decline in the number of transactions.

Buyers will continue to sit on their hands in the wake of the anticipated interest rate rise in the US and the uncertain global economic outlook, he said.

Investment bank BNP Paribas said in a research report that the recent decline of secondary housing volume showed that potential buyers have become more cautious.

In the primary market, 90 units were sold over the weekend of October 10-11, according to BNP Paribas.

A number of new projects in Yuen Long are likely to be launched in the fourth quarter, including K. Wah and Sino Land’s The Spectra and CK Property Holdings’ Yuccie Square . Given the keen competition from new projects in Yuen Long, BNP Paribas believes developers are likely to set attractive pricings to stimulate buyers’ interest.

According to Centaline, the latest Centa-City Leading Index, which monitors the city’s secondary home prices, rose 0.3 per cent week-on-week to 146.45. The Index also rose 10.6 per cent year to date.