Hang Seng Developers Slump as Slow Sales Spur Aggressive Tacticsby
Sun Hung Kai Properties offers mortgages worth 120% of value
Property agent Midland Holdings to swing to loss in first half
Hong Kong developers are headed for their biggest drop in more than six weeks on signs that the slump in home sales is spurring them to adopt increasingly aggressive measures to attract buyers.
The Hang Seng Properties Index fell as much as 2.3 percent and registered the second-biggest drop as a group on the benchmark Hang Seng Index. All 10 constituents in the property gauge were down.
Sun Hung Kai Properties Ltd. said in a notice on its website that it is offering mortgages of up to 120 percent of a home’s value in one project, which analysts said signaled that developers are stepping up efforts to sell off inventory. Midland Holdings Ltd., a Hong Kong property agent, said it expects to swing to a loss in the six months ending June as sales of homes slump across the city.
Sun Hung Kai Properties shares fell 1.9 percent to HK$87.80 as of 11:33 a.m. in Hong Kong, and Midland declined 1.9 percent to HK$2.08. Cheung Kong Property Holdings Ltd. lost 2.3 percent to HK$46.25.
"Overall property developers are very aggressive and trying to offload inventory because the outlook of the Hong Kong property market is not looking good," Raymond Yeung, a senior economist at Australia & New Zealand Banking Group Ltd., said by phone.