Surge in sales lifts secondary market

HONG KONG: Home sales in the secondary market surged last week as buyer confidence was boosted by confirmation that low interest rates were not about to change and the global economic recovery remained on track.

The mainland government's recent announcements regarding the prospects of greater exchange-rate flexibility were also seen as a positive development that could lead to more mainlanders buying Hong Kong properties, Patrick Chow Moon-kit, head of the research team at estate agency Ricacorp Properties, said.

Data compiled by Ricacorp showed that in the 50 housing estates that it monitors there were 713 preliminary sales and purchase agreements signed during the week from June 14 to June 20.

That was the highest transaction volume in the past 21 weeks and represented a jump of 38% compared with 518 deals done in the previous week.

"We saw many fresh faces looking for homes, and some long-term investors are interested in entering the market," said Chow.

He believed that more mainland investors would be returning to the Hong Kong market as the value of the yuan rose. "That will push up home prices," he said.

Despite the big jump in deals, prices were virtually unchanged. The Ricacorp data showed average transaction prices were up by just 0.2% cent on the previous week.

The increase in buyer demand in the secondary housing market was likely to continue, Chan Wing-kit, executive director of Centaline Property, said.

"Sentiment has turned around and buyers are eager to enter the market. We expect prices will rise 10% in the second half," he said. -- South China Morning Post
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