Home sales volume in the secondary market is expect to increase 50 per cent after the Lunar New Year as prices fall, particularly in areas with abundant supply , say agents. Sammy Po Siu-ming, chief executive at Midland Realty’s residential department, said he expected home buying interest would return next month after more owners cut prices. “In the year of monkey, the residential sector will turn into a bear from bull market,” Po said. In addition, the industry will enter into its traditional peak season for sales after the Lunar New Year holiday, which starts on February 8 and will last until February 10. Midland forecast the number of transactions in the secondary market would soar by 50 per cent to about 2,300 next month. But the surge will still fail to surpass the 4,643 transactions registered in February 2014. Po said overall home prices would dip 5 per cent this year after declining 6.4 per cent in 2015. He said some small flats in the New Territories had already lost as much as 15 per cent as they would be hardest hit in a market downturn. Wong Leung-sing, an associate director of research at Centaline Property Agency, said the supply of new flats will largely come from areas in the New Territories such as Yuen Long this year. Estimated completion of units in Yuen Long will reach 4,548, with 86 per cent or 3,419 flats lining up for pre-sale this year, Together with an inventory of 510 unsold units, Wong said units pending marketing for sale would increase to 3,929 “Developers will be under great pressure to speed up their project launches,” he said. Buggle Lau, chief analyst at Midland Realty, said average home prices had lost 6.4 per cent to HK$10,267 per square foot in December from a peak of HK$10,970 per square foot in August. The pace of growth in home prices slowed dramatically last year to 2.8 per cent, compared with 12.2 per cent in 2014. “As prices decline, prospective buyers’ affordability ratio is also improved, to the present 37 per cent from 39 per cent in August based on a 400 sq ft flat currently sold for an average of HK$4.1 million, down HK$280,000 from the peak in 2015,” Lau said. The ratio is widely used to measure housing affordability and is calculated by dividing the average market price of a standard home by the average or median annual household income. “Hong Kong average home prices will drop below HK$10,000 per square foot next year,” Lau said.