Hong Kong property

Home sales in Hong Kong’s secondary market drop to 21-year low in 2016

Meanwhile, the total value of new home sales in the city hits the highest level since 1995 as wealthy buyers snap up luxury property

PUBLISHED : Wednesday, 04 January, 2017, 8:35pm
UPDATED : Wednesday, 04 January, 2017, 10:52pm

Home sales in Hong Kong’s secondary market plunged to a 21-year low in 2016 as government cooling measures dampened demand, while a buying frenzy in the primary market pushed the value of new home sales to the highest level since 1995.

The extraordinary divergence between primary and secondary home sales emerged in data from the Land Registry released on Wednesday, which showed sales of second-hand homes dropped one per cent to 40,466 deals.

“It is the lowest since our firm started the study in 1996,” said Buggle Lau, chief analyst at Midland Realty.

The total value of secondary sales also fell to a three-year low of HK$241.5 billion, he said.

Although the number of transactions in the primary sector dropped slightly, by 0.02 per cent from a year earlier to 16,796, the total value surged 16 per to HK$188.4 billion last year - the highest since 1995.

Derek Chan, head of research at Ricacrop Properties, said this was because of an increasing number of cash-rich buyers snapping up super-deluxe apartments in the last quarter.

Last week, for example, Wheelock Properties announced it had sold at tender a luxury 9,950 square foot house at the Mount Nicholson development on The Peak for HK$1.08 billion or HK$108,543 per square foot.

The Land Registry said the number of sale-and-purchase agreements for all properties, including apartments, shops, industrial units and car parks, reached 73,004 in 2016, down 4.1 per cent from a year ago.

Total transaction value fell 2.9 per cent to HK$532.9 billion in 2016, while sales of residential units last month declined 47.3 per cent to 3,550. The data showed total transaction value for residential units alone was HK$32.86 billion last month, down 46.7 per cent from November.

Wong Leung-sing, associate director of research at Centaline Property Agency, said the government’s move to step up efforts to cool the market in November had dampened demand.

“Buying confidence has been severely hurt by the curbs,” he said.

From November 5, the government increased the stamp duty for all residential transactions to 15 per cent from 8.5 per cent, except for buyers who do not already own property.

Developers deferred their marketing of new projects due to the sour market sentiment.

The government data showed that last month the number of transactions for new flats slumped 79.8 per cent from November to 443. The total transaction value for new homes amounted to HK$9.19 billion last month, down 70.7 per cent from November.