First-half home sales to soar 50pc as Hong Kong developers clear backlog

Sales of new homes are set to surpass HK$60 billion in the first half of this year as developers seek to cash out while the going is good.

The estimated sales value for the first six months, say industry observers, is about 50 per cent higher than the same period last year, when most developers held back their launches as a new sales rule became effective amid continuing government curbs to cool the property market.

"Market sentiment turned around after Cheung Kong's project in Tsuen Wan generated a stronger response than expected," said Alfred Lau, an analyst at Bocom International.

Market watchers estimate buyers have snapped up HK$54 billion worth of new flats so far this year. With another 640 units worth about HK$10 billion in four residential projects to hit the market this weekend, Lau said, contract sales in the primary residential market could reach more than HK$60 billion in the first half.

Driven by the strong sales of City Point in Tsuen Wan, Cheung Kong, which failed to meet its HK$30 billion sales target last year, is likely to beat rivals to record the best sales figures for the first half.

Helen Fung, senior sales manager at Cheung Kong, said it made nearly HK$10 billion from the sale of 1,400 units at the 1,717-unit City Point in Tsuen Wan within 15 days. This is Cheung Kong's third project on the market after the 402-unit Trinity Towers in Sham Shui Po and 118-unit Diva residential project in Tin Hau.

Cheung Kong will offer another 175 units worth HK$1.9 billion in City Point this weekend.

Louis Chan Wing-kit, the managing director of Centaline's residential department, said project launches would continue to find favour with buyers as long as developers offer discounts and stamp duty subsidies.

"Developers still don't have any room to raise prices or remove incentives at this moment," he said.

Factoring in the second-hand home market, realtor Hong Kong Property Services predicts total transactions in the first half would rise 2 per cent year on year to 28,000.

Jeffrey Ng, a senior executive director at Hong Kong Property Services, however, estimates the combined transaction value in the new and second-hand home markets would amount to HK$147 billion, down 4 per cent from a year ago.