Secondary market sales in Hong Kong fall 25%

HONG KONG: Home sales in the secondary market here fell 25% last week as buyers turned cautious and the government announced cooling measures.

There were 377 preliminary sales and purchase agreements signed at 50 major housing estates in Hong Kong from April 15 to 19, according to Ricacorp Properties. That was 25% fewer than the previous week.

The decline came as the government on April 21 announced that developers were required to sell more units in the first batch of sales at a new development -- a move intended to limit their ability to manipulate prices.

The government also threatened to introduce tougher measures, including an increase in stamp duty on non-luxury flats, a ban on reselling unfinished homes -- a practice popular with speculators -- and requiring developers to put all flats up for sale within a certain period.

The government may also extend to cheaper flats two measures recently applied to sales of flats worth HK$20 million (RM8.27 million) or more -- a stamp duty increase and a ban on deferring payment of duty -- if there is excessive speculation in such properties.

Midland Realty chief analyst Buggle Lau Ka-fai said transaction volume would slow this month as buyers would stay on the sidelines.

Capital inflow from mainland will fall as the central government tightened lending, said David Chan, a director of Ricacorp Properties. – South China Morning Post