Ad spending on Hong Kong residential properties fell 22 per cent in 2015 as buying sentiment soured

Advertising spending by developers on residential properties plunged 22 per cent last year, the lowest level since 2013, as the market suddenly shifted from boom to bust in the last quarter as buying sentiment turned sour.

However, real estate agents, which collectively increased their promotional spending by 44 per cent last year, said they would cut the budget this year in the wake of the tougher operating environment as the government’s property cooling measures and growing bearishness continue to bite.

“In a bear market we will tighten our purse strings,” said Sammy Po, chief executive of the residential department at Midland Realty. “We will cut our spending and advertising expenses will be one of them.”

Midland’s advertising expenditure to promote second-hand projects and corporate image increased 56 per cent year on year in 2015, while Centaline Property Agency’s ad spend was up 37 per cent and Ricacorp Properties’ budget increased 43 per cent, according to a study by research house AdmanGo.

Boosted by the big increase in ad spending by estate agents, property and real estate companies recorded a 4 per cent increase in year-on-year spending to a combined HK$1.75 billion last year, ranking the sector No 9 in terms of advertising spenders in Hong Kong, up from No 12 in 2014.

David Chan, a director at Ricacorp Properties, said the firm would also reduce its promotional budget.

“This year is going to be difficult. The secondary market will continue to be frozenas the government is unlikely to remove the special stamp duty and buyers’ stamp duty,” he said.