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HONG KONG: Home sales continued rebounding from a near six-year low a fortnight ago, as property market sentiment showed some signs of improving.
"After a few weeks of cooling down, the impact of negative factors, including the European debt crisis, rising mortgage rates and tighter access to loans, has lessened," a director at Ricacorp Properties, David Chan, said. "We are seeing buyers recover their confidence and this has boosted secondary flat transactions."
Latest data compiled by Ricacorp show 195 homes were sold in the secondary market in the 50 largest housing estates it monitors during the week from July 11 to 17. That was up 28% from 153 transactions the previous week and 33% from the 146 sales in the week before that — which was the lowest since November 2005, after taking out the quiet Lunar New Year periods.
But the figure is still well below a weekly average of 332 secondary market sales a week over the first five months of the year.
Houses in the New Territories were the most sought after, recording a 56% increase in transactions from 73 to 114. On the Kowloon peninsula, sales were up more modestly, by just 4% to 58 transactions, while sales on Hong Kong Island remained low, with 23 deals, down from 24 the previous week.
No transactions were recorded at Lei King Wan, City Garden, Park Avenue, Sky Tower, Liberte and Serenity Park, Ricacorp said.
In the new-home market, 62 flats were sold over the weekend, an increase of 8.8% week on week from the 57 flats sold over the previous weekend, according to a Samsung Securities report. About 65% of these transactions were at Sun Hung Kai Properties's luxury Imperial Cullinan development in West Kowloon.
Midland Realty director Andy Ho Ming-pui said improving sentiment was due to assurances given to lawmakers last week by Chief Executive Donald Tsang Yam-kuen. Tsang said the government's policy objective was to keep the property market stable and healthy, and it would not launch severe measures that would hit the market.
Both Chan and Ho believed prospective buyers would continue their gradual return to the market and boost transaction volumes further.
However, some analysts believe deal volumes will continue to hover at their present low levels.
"With more banks raising their mortgage rates, we expect potential buyers to become more cautious, which will affect both primary and secondary transaction volumes," warned Samsung Securities analysts Lee Wee Liat and Patrick Wong in a report on the market.
A number of banks raised their Hibor-based mortgage rates earlier this month. Among the latest was Citibank, which lifted its mortgage rates by 20 basis points to between Hibor plus 1.7% and 2.2%, capped at prime minus 2.8%.
"In view of subdued market sentiment, some developers have been forced to slow down their launch schedules. For example, Cheung Kong has postponed its launch of Lohas Park Phase 2C in Tseung Kwan O from July to August," the Samsung Securities report noted.
According to the latest Centa-City Index, average property prices fell 1.4% week-on-week to an index level of 98.89 points over the period from July 4 to 10. This reflected the impact of the new round of mortgage rate increases and the government's reduction of loan-to-value ratios, the analysts said. — SCMP
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