Hong Kong property

Hong Kong home sellers begin to drop prices to lure buyers in depressed market

After weeks of holding out, homeowners are beginning to drop their prices, with about one in 10 shaving 5 to 10 per cent off to get a sale

PUBLISHED : Wednesday, 10 April, 2013, 12:00am
UPDATED : Wednesday, 10 April, 2013, 5:47am

Hong Kong home sellers have begun cutting their asking prices in response to weakening buying sentiment, property agents say.

The government's cooling measures "have created a severe situation for sellers", Centaline Property managing director Louis Chan Wing-kit said. "Some have waited for up to 40 days to clinch a deal, so now they feel they need to lower prices."

When market sentiment is positive it is not uncommon for deals to be done within 24 hours. The turnaround follows a 23 per cent rise in prices for second-hand flats of small and medium size last year.

About a tenth of owners were now willing to cut their asking price by 5 per cent to 10 per cent to get a sale, Chan said. After some cut prices, sales rebounded slightly but still remained at a very low level. "It is still a very quiet market and more sellers are likely to cut prices as they discover no one is coming to view their flats, or those who do come look but do not buy."

In the week ending April 7, 82 flats sold on the 50 private housing estates monitored by Ricacorp Properties, up 39 per cent on the ultra-low level of 59 transactions the previous week in the aftermath of the latest cooling measures, but well below 2012's average of 245 sales per week.

Ricacorp director David Chan said some sellers had cut prices because of fears of a bird flu outbreak and the North Korea situation. But in Shanghai, the epicentre of the latest bird flu outbreak, analysts said real estate sentiment had not been affected.

Midland Realty chief analyst Buggle Lau Ka-fai noted that sellers had begun to leave more room for price negotiation since the end of the Easter holiday.

In the new-homes market, 33 flats sold on April 6 and 7, down by two-thirds from the 97 sold during the previous, four-day weekend and the lowest total this year, BNP Paribas said.

Henderson Land and New World sold seven flats at The Reach at the weekend, sharply down on the 44 sold the previous weekend, and CSI Properties and ITC Group sold eight flats at their yoo Residence in Causeway Bay.

BNP Paribas property analysts Patrick Wong Chi-leung said sales at some projects remained weak, and there were no sales at Sun Hung Kai Properties' luxury project Riva in Yuen Long and Sino Land's Park Ivy in Tai Kok Tsui at the weekend.

"In projects where sales are weak, developers may monitor the market situation first before cutting prices or they may offer some stamp duty rebates to woo buyers," Wong said.

Potential launches in April include Cheung Kong's 402-flat The Rise in Kwai Chung and the Kowloon Development-Urban Renewal Council project MacPherson Place in Mong Kok, which will offer 293 flats. Kerry Properties' Bayview in Hung Hom may also be put on the market this month.