Weekend transactions of used apartments in Hong Kong rose as an index tracking home prices in the city had its biggest weekly drop in more than six months, according to Centaline Property Agency Ltd.
Sales at projects including Tai Koo Shing and Mei Foo Sun Chuen increased 25 percent to 66 from a week earlier, Centaline, Hong Kong’s largest closely held realtor, said in a statement today. Midland Holdings Ltd., the city’s biggest realtor by market value, said transactions dropped to 45 from 50, according to a press release.
Hong Kong on Nov. 19 intensified a yearlong battle to curb surging home prices with additional taxes and policies a day after the International Monetary Fund warned that asset inflation may derail the city’s economy. Homes sold within six months of purchase will now incur a 15 percent stamp duty, and down payments will increase for most mortgages, with those for homes costing at least HK$12 million ($1.54 million) rising to 50 percent from 40 percent.
Louis Chan, managing director for residential sales at Centaline, said in a statement that “some end-users are taking advantage of the recent correction in prices to buy, while long-terms investors also prefer these big blue-chip projects for their stable returns.”
The Centa-City Leading Index, which tracks the city’s home prices, fell 1.28 percent in the week ended Dec. 12 from a week earlier, its biggest fall since May 30, to 88.27, Centaline said Dec. 17.
Hong Kong’s residential transactions may fall as much as 35 percent in 2011 from 2010 after the government measures, Midland said earlier this month.
Hong Kong policy makers including central bank head Norman Chan see property-price bubble risks as U.S. monetary easing contributes to capital inflows. Hong Kong’s currency peg to the dollar prevents officials from raising interest rates to cool demand.