Home sales in Hong Kong buoyant despite price concerns

HONG KONG: Home sales here show no sign of abating despite the government's message that it will closely monitor the booming real estate sector and mounting calls for building to start again on subsidised flats for the needy.

From March 1 to March 7 there were 420 pre-sale agreements signed for second-hand homes, a rise of 23% on the 342 deals in the previous week, according to Ricacorp Properties. Prices rose 0.1% week-on-week, taking growth in the past 15 weeks to 8.5%, it said.

Bolstered by strong sales of the primary project Yoho Midtown in Yuen Long, sales in the New Territories' secondary market rose 42% to 204 deals. Prices in housing estates such as Kingswood Villas and Park Island recorded rises of 6.3% and 5.8%, respectively.

The continuous growth came as the government raised its concerns over rising home prices. Last month stamp duty was increased on sales of luxury homes.

Recently, business leaders including the managing director of New World Development, Henry Cheng Kar-shun, have called for the government to resume building Home Ownership Scheme flats and provide more housing to help prospective homeowners.

Some analysts said resumption of the scheme would pose a threat to the private housing sector.

Given the stable economic situation in Hong Kong and the region, and the continuous low interest rate environment, home prices would see support in the near term, said Alva To, head of consulting at international property consultant DTZ's North Asian region.

Having said that, he highlighted the fact that average household income had actually dropped over the past year -- from HK$18,000 (RM7,715) in the second quarter of 2008, the pre-crisis level, to the latest figure of HK$17,500 in the fourth quarter of 2009. – South China Morning Post