Weekly Home Sales Fall in Hong Kong's 10 Biggest Private Housing Projects
Transactions of used apartments at 10 of Hong Kong’s biggest private developments fell for a second straight week as sellers held out for their listed asking prices after consecutive government land auctions that beat estimates.
Thirty-six deals were recorded in the week ended yesterday in 10 housing complexes including Taikoo Shing in the Island East and Mei Foo Sun Chuen on the Kowloon Peninsula, compared with 40 transactions a week earlier, Centaline Property Agency Ltd. said in a statement yesterday.
The government Aug. 13 raised down-payment ratios and said it will increase land supply amid concerns housing is becoming unaffordable after a 45 percent surge since the beginning of 2009. Kerry Properties Ltd. paid HK$1.29 billion ($165 million) for a plot in the Kowloon Tong district last week, setting a per-square-foot record for Kowloon.
“The government measures seem to have cooled down the market a bit as they have made speculation costlier,” said Jonas Kan, a Hong Kong-based analyst at Daiwa Institute of Research. “We’re expecting transactions to stay flat for a while. Anything further down the road will depend on what their next round of announcements is going to be.”
The government is closely monitoring the property market and may introduce further measures to contain prices if they continue to escalate, Ming Pao on Sept. 1 quoted Financial Secretary John Tsang as saying in written replies to questions from the newspaper.
The city’s developers will build about 61,000 apartments in the next three years as part of the plan to boost supply, Tsang said in Beijing yesterday according to a government transcript.
The Hang Seng Property Index that tracks the performance of seven developers in the city rose 2.8 percent at the 4 p.m. local close in Hong Kong, advancing for a third consecutive day.
Hong Kong’s home sales rose 33 percent by value in August to the highest in almost three years as the number of transactions completed in the first half of the month outweighed the second-half’s decline, the Land Registry said Sept. 2.
“There’s a mixture of good and bad news,” said Louis Chan, managing director for residential property at Centaline. “The market will still be looking for direction in September.”
Hong Kong will next month sell a site adjacent to the one Kerry Properties bought Aug. 31 for HK$16,587 per square foot. The plot may fetch as much as HK$17,000 per square foot, according to an estimate from real estate broker Midland Holdings Ltd., and the sites can be combined for a bigger project with a higher profit margin.
Hong Kong also will sell two residential sites in the Fanling and Chai Wan districts Sept. 29.
“The government is trying very hard to cool the market, but is also being careful,” said Alnwick Chan, Hong Kong-based executive director at property consultant Knight Frank LLP. “Out of all intervention measures, increasing the supply of apartments and land is probably the least controversial.”
Singapore has joined Hong Kong in imposing anti-speculation measures, underscoring the risk of asset bubbles in Asia as record-low U.S. interest rates and the region’s economic recovery spur demand.
Cheung Kong (Holdings) Ltd., controlled by Hong Kong’s richest man, Li Ka-shing, paid more than estimated for a site in the Ho Man Tin district, near Kowloon Tong, four days after the government Aug. 13 increased down payments for apartments costing HK$12 million or more.
Hong Kong’s home prices have surged about 45 percent since the beginning of 2009 on record low mortgage rates and the influx of wealthy mainland Chinese buyers, according to Centaline.