Transactions fall 63% in Aug to 5,439

Home sales in Hong Kong fell 63 percent in August from the same period a year ago, the eighth consecutive monthly fall, as more would-be buyers stayed on the sidelines ahead of the October policy address by Chief Executive Donald Tsang, who is expected to announce further measures aimed at cooling down the property market.

The number of home sales declined to 5,439 last months from 14,699 a year ago, data from the Land Registry showed. The percentage drop was the biggest since February 2009.

In value terms, home transactions dropped 54 percent to HK$31.8 billion ($4 billion) from HK$69.22 billion a year ago.

Home sales are expected to continue to be under pressure in the coming months, analysts believe.

"The negative factor that plagued the housing market in early August, such as the volatility in global financial markets following the downgrade on the US sovereign credit rating and the below-expectation winning bid for a prime residential lot sold in an auction, have yet to be reflected in the registered home sales figure," said Buggle Lau, chief analyst of Midland Realty, in a research note.

The August figure reflected the actual sales in July as it took around four weeks to register a transaction with the Land Registry, he explained.

"Registered home sales in September are expected to remain below 8,000 units, the third consecutive month that sees home sales below this level," the research department of Hong Kong Property forecast in an emailed note.

The private housing market has seen early signs of cooling down recently, with both transactions and prices easing, after the government unveiled a series of measures such as accelerating land sales and imposing a penalty stamp duty of as high as 15 percent on speculative transactions in an attempt to curb home prices which have jumped more than 70 percent since early 2009.

Sellers have cut their asking prices recently amid falling transactions, with asking prices declining by as much as 10 percent from the peak in June, according to data from Midland Holdings Ltd and Centaline Property Agency Ltd, the two biggest brokerages in the city.

The recent turmoil in the global financial markets amid the European debt crisis and worries about a double-dip recession in the US economy has also weighed on sentiment.

Meanwhile, would-be buyers have also taken a wait-and-see attitude ahead of the last policy address by the chief executive, who is expected to announce comprehensive housing policies, including the possible resumption of the Home Ownership Scheme, a program that allows financially less capable home buyers to buy a flat at a 30-40 percent discount to market price.

george@chinadailyhk.com

China Daily

(HK Edition 09/03/2011 page2)