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HONG KONG: Property consultants have put a positive spin on the recent slowdown in sales activity, saying prices have not peaked yet and that the market is just taking a breather before continuing its upward momentum.
The first week of the month saw transaction volume in major housing estates dropping 15% compared with a week earlier.
However, week-on-week average prices still edged up 0.3% as at Aug 6 and 2.5% month-on-month, according to property benchmark Centa-City Index.
Taking into account the latest price gain, luxury homes have jumped 17.8% to an average of HK$18,595 (RM7,571.79) per square foot, while mass market homes have jumped 11% to HK$5,413 per sq ft since the start of the year.
"Although sales volume has fallen there is no sign of a market peak as interest rates are still at a historically low level," said Patrick Chow Moon-kit, the head of research at Ricacorp Properties.
He attributed the slow sales mainly to potential homebuyers and investors taking to the sidelines after rapid increases in home prices.
Data compiled by Ricacorp showed that in the 50 housing estates it monitors there were 506 sales agreements signed during the week from August 2 to 8, down 15% from 594 units a week earlier.
"The figure was the lowest in the past nine weeks," Chow said.
Meanwhile, several owners have raised their asking prices amid strong sales in the primary market and positive results from land auctions.
"Some owners are extremely bullish, raising their asking prices half a million dollars — equivalent to someone's annual income. Flat hunters definitely need more time to digest the rapid surge in prices," Chow said.
This optimism among high-end owners comes as Sun Hung Kai Properties said buyers had snapped up 66 units at its joint venture luxury residential development, Larvotto, over the weekend. This brought the total number of units sold to 500 for a combined HK$12.5 billion.
Brain Wong, a sales manager at Hong Kong Property Services (Agency)'s West Mid-Levels, said about half of the owners in the area had raised their asking prices by five to 10%.
"Vendors are not in a hurry to sell until they receive an attractive offer," he said.
Owners were standing firm on the asking prices after a site on The Peak sold for HK$10.4 billion in a government land auction last month.
Nan Fung Development and The Wharf (Holdings) paid HK$32,014 per square foot for the site at 103 Mount Nicholson Road. The average price for houses on the site would have to reach HK$55,000 to HK$60,000 per square foot for the developers to make a reasonable profit, while flats would have to go for HK$35,000 per square foot.
Benny Sze, a sales manager at Midland Realty's Taikoo Shing branch said a client had just sold an 876 square foot unit for HK$8.8 million. "The transaction price was just HK$200,000 less than the HK$9 million the owner paid for it during the market peak in 1997. The buyer plans to hold on to the unit as an investment," Sze said.
Buggle Lau Ka-fai, chief analyst at Midland Realty said he expects overall home prices to increase 18% this year with total transactions around 120,000.
Buying confidence gradually returned in late June after a one-month consolidation period when the government announced plans to cool the property market. Sales in July rose 34% compared with June to 14,885.
"Sales volume saw a landmark improvement last month as the government's guidelines to regulate the marketing of new projects did not dampen buying interest at all," he said.
In the primary market alone, buyers snapped up 1,125 new units in July, compared to 494 units in June. — South China Morning Post
The first week of the month saw transaction volume in major housing estates dropping 15% compared with a week earlier.
However, week-on-week average prices still edged up 0.3% as at Aug 6 and 2.5% month-on-month, according to property benchmark Centa-City Index.
Taking into account the latest price gain, luxury homes have jumped 17.8% to an average of HK$18,595 (RM7,571.79) per square foot, while mass market homes have jumped 11% to HK$5,413 per sq ft since the start of the year.
"Although sales volume has fallen there is no sign of a market peak as interest rates are still at a historically low level," said Patrick Chow Moon-kit, the head of research at Ricacorp Properties.
He attributed the slow sales mainly to potential homebuyers and investors taking to the sidelines after rapid increases in home prices.
Data compiled by Ricacorp showed that in the 50 housing estates it monitors there were 506 sales agreements signed during the week from August 2 to 8, down 15% from 594 units a week earlier.
"The figure was the lowest in the past nine weeks," Chow said.
Meanwhile, several owners have raised their asking prices amid strong sales in the primary market and positive results from land auctions.
"Some owners are extremely bullish, raising their asking prices half a million dollars — equivalent to someone's annual income. Flat hunters definitely need more time to digest the rapid surge in prices," Chow said.
This optimism among high-end owners comes as Sun Hung Kai Properties said buyers had snapped up 66 units at its joint venture luxury residential development, Larvotto, over the weekend. This brought the total number of units sold to 500 for a combined HK$12.5 billion.
Brain Wong, a sales manager at Hong Kong Property Services (Agency)'s West Mid-Levels, said about half of the owners in the area had raised their asking prices by five to 10%.
"Vendors are not in a hurry to sell until they receive an attractive offer," he said.
Owners were standing firm on the asking prices after a site on The Peak sold for HK$10.4 billion in a government land auction last month.
Nan Fung Development and The Wharf (Holdings) paid HK$32,014 per square foot for the site at 103 Mount Nicholson Road. The average price for houses on the site would have to reach HK$55,000 to HK$60,000 per square foot for the developers to make a reasonable profit, while flats would have to go for HK$35,000 per square foot.
Benny Sze, a sales manager at Midland Realty's Taikoo Shing branch said a client had just sold an 876 square foot unit for HK$8.8 million. "The transaction price was just HK$200,000 less than the HK$9 million the owner paid for it during the market peak in 1997. The buyer plans to hold on to the unit as an investment," Sze said.
Buggle Lau Ka-fai, chief analyst at Midland Realty said he expects overall home prices to increase 18% this year with total transactions around 120,000.
Buying confidence gradually returned in late June after a one-month consolidation period when the government announced plans to cool the property market. Sales in July rose 34% compared with June to 14,885.
"Sales volume saw a landmark improvement last month as the government's guidelines to regulate the marketing of new projects did not dampen buying interest at all," he said.
In the primary market alone, buyers snapped up 1,125 new units in July, compared to 494 units in June. — South China Morning Post
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