Share
HONG KONG: Property developers cut back sharply on advertising budgets in the first quarter of the year — contrasting with a big rise in advertising spending in other sectors in the period.
Advertising spending for residential property projects fell 45% in the first quarter from a year ago to HK$86.26 million (RM33.1 million), mainly because of government measures to curb demand in the sector, according to data from market researcher admanGo.
That figure was down 27% from the previous quarter's HK$118.25 million.
"The decline was mainly the result of the government regulations — many property firms cut advertising because of this," Jennifer Ma, the director of sales and marketing at admanGo, said.
But general advertising spending in Hong Kong rose 15% in the first quarter to HK$7.72 billion, led by bigger ad budgets in the banking and investment services sector.
The government introduced a series of measures in November aimed at curbing speculation in the property market.
They included additional stamp duty for speculative buying and quick resale of properties.
In the month after the measure was brought in, advertising spending for residential properties was just HK$15.95 million, while in January it was HK$17.84 million.
Those figures compared with HK$54.61 million in October and HK$47.49 million in November.
Henderson Land Development moved up a notch to become the biggest advertiser in the sector, spending HK$14.89 million on advertising in the first quarter.
That was more than one-third less than its advertising expenditure in the same period last year.
The second-biggest advertiser, Chinachem Group, spent HK$12.24 million in different media to promote its properties between January and March, 7.91% more than the same period last year.
The other two big developers in the city, Cheung Kong (Holdings) and Sun Hung Kai Properties, cut advertising spending significantly — by 27.18% and 68.73%, respectively — to take third and fourth ranking in the spending stakes.
Wing Tai Properties, formerly USI Holdings, posted strong growth in advertising spending in the first quarter — its HK$4.12 million expenditure was an increase of 455% from a year ago.
Ma said spending on property advertisements picked up in March to HK$44.33 million, slightly less than the November figure.
"The amount of advertising spending should soon get back to normal as many developers are expected to launch new projects for sale," she said.
Patrick Chow Moon-kit, head of research at Ricacorp Properties, said developers halted their sales plans after the government announced the measures in November.
"First, there weren't many new apartments on sale in the first quarter. Second, the government tightened restrictions on property ads — these two factors may have affected spending on advertisements," Chow said.
But he said there were a number of large luxury properties coming up for sale in the coming months, so advertising spending on residential property should increase. — SCMP
SHARE
