HONG KONG • Sales of homes in Hong Kong slumped to the lowest level in at least a quarter-century last month, Centaline Property Agency said, while indicating that prices have further to fall.
It estimated that January sales of new and secondary homes would reach 3,000 units, the lowest monthly figure since it started tracking data in January 1991. The previous low was 3,786 units in November 2008, according to a Jan 31 release.
"The Hong Kong residential market is all about sentiment," Ms Joanne Lee, senior manager of the Hong Kong research and advisory team at Colliers International, said yesterday. "Falling stock market prices, the economy weakening, China's economy weakening and increases in the interest rate will all have an impact."
Hong Kong's property market has been showing signs of weakening since reaching a peak in September, amid a rising supply of homes and slowing growth in China.
Housing prices are down 9.5 per cent from September, according to the Centaline Centa-City Leading Index, and may fall a further 20 per cent this year, according to some estimates.
Last month's tepid demand was pronounced as buyers traditionally delay making purchases in the lead- up to the Chinese New Year holiday, which this year begins on Feb 8. In turn, many developers have delayed the launch of new projects. December's sales were 5,294 units.
The drop was particularly sharp in the primary market, with an estimated 420 new units sold last month, down 80 per cent from December's 2,127 units, Centaline said.
To boost sales, developers have been offering discounts and stamp duty rebates as well as second mortgages allowing buyers to finance up to 90 per cent of a home's value.
Henderson Land's Harbour Park mass market development in Kowloon sold 15 units in January with discounts and rebates of up to 11 per cent, out of a 60 units released, according to the company website.
Prices before discounts ranged from HK$3.47 million (S$635,000) for a 202 sq ft unit to HK$4.86 million for a 276 sq ft flat.
"If developers want to sell, especially for projects in the New Territories, they have to provide incentives to potential buyers," said Mr Thomas Lam, senior director of valuation and consultancy at Knight Frank.
"If they want to launch a new project, they will have to offer more incentives than 12 months ago."