Home sales continue their slide
Oct sees city’s house transactions fall for 10th month in a row
Hong Kong’s home sales fell for a 10th consecutive month in October, dropping more than half in both value and volume terms compared with a year ago.
The number of home sales in the city was recorded at 4,643 last month, representing a 3.7 percent decline compared with September and 51.4 percent drop from October 2010, the Land Registry said on its website on Tuesday.
The value of transactions in October also slumped 50 percent to HK$22.5 billion from the same period last year. The sales are also 2.2 percent less than September, according to government figures.
Wong Leung-sing, associate director of research at Centaline Property Agency Limited, noted in a report that both transaction value and volume in October were the lowest on record since February 2009 when 5,043 home transactions were registered with a total sales value of HK$15.8 billion.
In September, a number of lenders in the city, including HSBC, BOC Hong Kong and Citigroup, raised the Hong Kong interbank offered rate (Hibor) and mortgage rate linked to the prime rate – two popular mortgage calculation methods in the city.
Residential property trading activities have slowed since the end of 2010, following the introduction of the Special Stamp Duty and earlier rounds of macro tightening measures, the Hong Kong Monetary Authority said in its half-yearly report released in late September.
Sale and purchase agreements averaged about 9,200 a month during the first six months of 2011, down almost 20 percent from last year. Speculative activities have also softened, according to the report.
However, Financial Secretary John Tsang on October 27 warned that the risk of a housing bubble hasn’t abated despite the steep fall in the number of home transactions.
Home prices, which were 3 percent lower in August compared with June, are still well above the previous peak levels in 1997, according to Tsang.
Hong Kong’s home prices would drop by 35 percent to 45 percent over the next two years in the “hard landing” scenario of a deflationary economic environment, Barclays Capital Research said in a report released on Tuesday.
Even in a “soft landing” scenario, continued mortgage rate increases and a slowing economy will drive prices 25 percent to 30 percent lower over 2012 and 2013, analysts at Barclays wrote in the report.
Buggle Lau, chief analyst of Midland Realty, expects transactions on second-hand homes to further decline in November in the city as investors are holding back amid current market sentiment.
“First-hand home sales will probably rebound as new launches will take place all together in the next few months,” said Lau.
litao@chinadailyhk.com
China Daily
(HK Edition 11/03/2011 page2)
http://www.chinadaily.com.cn/hkedition/2011-11/03/content_14027038.htm