So what should owners do if they are looking to sell a property in the present climate?
Paula Lam, who runs the Central-based brokerage Fidelity Realty, said some owners would change strategy and look to rent rather than sell. That might be a better short- to medium-term approach until the number of transactions picked up again.
Those intent on selling, however, could reduce their asking prices since bargain hunters were beginning to re-enter the market.
"Adjust the price down by 10% if you really want to sell," Lam said. "Some long-term buyers are starting to look at the market because they are hoping to find something below market value. But they know the adjustment is not much."
Last month the government imposed additional stamp duty of up to 15% on properties resold within two years of purchase. At the same time, the Hong Kong Monetary Authority reduced the maximum loan-to-valuation ratios for mortgages on properties worth HK$8 million (RM3.23 million) or more.
It is always important to show your property to maximum effect, and that may be particularly true in a slow market. Make sure the lighting is turned on and shows off the apartment well. If it is hot, put the air conditioning on. Even if the apartment is not being used, it may be worth stocking the fridge and offering prospective buyers something to drink.
Caroline Ergetie, who runs the Mid-Levels brokerage House Hunters, recommends fresh flowers to give an apartment a sense of life. She said it was a good idea to install some simple furniture if the apartment was empty, since it can be hard for buyers to imagine what they can fit in a room. Decor should be minimalist and simple. Most importantly, make sure the apartment is clean, particularly the kitchen, the bathroom and the windows.
"These are little tricks, and they're probably third or fourth or fifth on the list, after value for money," she said. "Hong Kong is very pragmatic. In New York and London, people live off doing up old places and selling them off. Here, you pay per square foot, not for the walls you put in."
"Staging" an apartment to make it look as if someone lives there, even if it is empty, is popular in Canada, the United States and Australia. Some of the more elaborate strategies include baking cookies or grinding coffee before an open house, to give a property that "homey" feel.
Brokers say staging is less important in all-business Hong Kong, where price, size and location are the key determinants and buyers often buy property sight unseen — particularly if there is a standing tenant, which makes it unlikely a buyer can vet an apartment.
Natasha Usher, an interior architect who runs Nude Design, says a well-decorated apartment might command a 10% premium over units in the same building — but there is no guarantee.
"Interior design for us has no selling appeal, unless you're talking about an old building that you reposition," Usher said.
So most property professionals recommend touching up any obvious blemishes and perhaps considering a fresh coat of paint. Other, more substantial renovations are unlikely to be reflected in the final price.
"If it's decorated in a nicer way, you might be able to get 10% more but there's no guarantee," Usher said. "You're selling boxes here, really, modules."
Decorations and fittings in an apartment were much more important in rental units than in apartments that were for sale, brokers said. It might also make more difference with lower-priced units that are intended to be in move-in condition.
Renovations after a sale must be paid for in cash, whereas new decoration in a sale unit could be bundled into the purchase price, and therefore financed.
"For the lower sector under HK$10 million, sellers may have to do a total renovation ... make it like new ... because the buyers can't put that in the mortgage," said Henry Fung King-kuen, a broker with Midland Realty.
It is that segment of the market that is likely to remain most active, with sales of units under HK$5 million still relatively vibrant. The special stamp duty is the only new rule that applies to apartments below HK$8 million, and it may result in fewer units being put up for sale, reducing supply.
Brokers expect the biggest drop in turnover to be on properties priced between HK$8 million and HK$12 million, on which the maximum loan-to-value ratio has been reduced to 60% from 70%. Sellers in that range may have to price more aggressively to attract buyers.
Victoria Allan, a broker who runs Habitat Property, said properties at the lower end of the luxury range would also be hard to sell because buyers for those homes typically required a mortgage and buy them for self-use.
The new measures were hurting "people who are trying to buy for self-use who are mortgage-reliant". Allan says there should be an exemption on the loan-to-valuation ceiling for those buying flats for self-use or long-term investment for rental."
Midland's Fung said although luxury apartments commanded the highest prices, they also paradoxically had the lowest premium on decoration. Buyers at the very high end tended to pay in cash, and looked to carve their own style onto their purchase.
"You need some facelifting, but you don't need to spend too much money on it, a little bit of paint," he said. — South China Morning Post
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