- Ricacorp says October sales could be lowest since 1996
- Hong Kong home prices up almost 400 percent since 2003
Hong Kong’s existing-home transactions probably fell to the lowest level in almost 20 years in October as prospective buyers are waiting for prices to drop and sellers refrain from settling for less money, according to Ricacorp Properties Ltd.
The number of transactions in the secondary market may fall to about 2,000, the lowest level since at least 1996 when the property agent started collecting the data, Derek Chan, head of research at Ricacorp, said in an e-mailed statement Wednesday. That would be lower than the 2,200 to 2,500 monthly transactions recorded in 2003, when the city was in the grip of the severe acute respiratory syndrome, known as SARS.
Hong Kong Chief Executive Leung Chun-ying on Oct. 22 vowed to “resolve the housing issue” in the financial center, where home prices have jumped more than 370 percent to a record since 2003. The government has previously said it plans to increase total housing stock by 18 percent, or 480,000 homes, in the next decade. Leung and the city’s de facto central bank have also implemented a series of cooling measures, including tightening mortgage rules and raising transaction levies for overseas investors.
Leung, in his Oct. 22 speech to lawmakers, also said prices in primary and secondary markets have “started to decline,” without providing specific data.
Banks including JPMorgan Chase & Co. and Morgan Stanley have said they expect property prices will start to fall in Hong Kong as the economy weakens and interest rates increase. Henderson Land Development Co. Chairman Lee Shau-kee said prices would fall 5 percent in the each of the next two years, according to a Hong Kong Economic Times report on Oct. 16.
Secondary private residential property prices dropped 0.19 percent during the Oct. 12-18 period from a week earlier, falling for a fourth week in five, according to an index published by broker Centaline Property Agency Ltd.
Total property transactions, including new homes, in the first 26 days of October were 3,711, down 24 percent from the same period a month earlier, Chan said in the statement, citing Land Registry data. He expects total transactions to be 4,640 in October, the lowest in 19 months.
— With assistance by Alfred Liu, and Emma Dong