Bloomberg News

Hong Kong October Home Sales Decline 50% to HK$22.5 Billion

November 02, 2011

(Updates with analyst’s comment in third paragraph.)

Nov. 2 (Bloomberg) -- Hong Kong’s home sales fell for a 10th straight month, dropping by half in October from a year ago as buyers put off purchases.

The value of transactions last month declined 50 percent to HK$22.5 billion ($2.9 billion), the city’s government said in a statement on its website today. Sales of residential units decreased 2.2 percent from September, it said.

“Transactions slowed down quite significantly particularly in the secondary market,” said Buggle Lau, analyst at Midland Holdings Ltd., Hong Kong’s biggest publicly traded realtor. Lau said while transactions in the primary market rose last month, it wasn’t enough to offset the slide in used home sales.

Real estate prices, which have surged more than 70 percent since early 2009, fell for the first time in seven months in July after the government introduced new housing curbs in June. Banks increased mortgage rates in September.

The rising number of Hong Kong homeowners with apartments worth less than their mortgages may further hurt sentiment already damped by the global equity rout and government curbs, Barclays Capital Research wrote in an Oct. 31 report.

The threat of a global economic slowdown is intensifying risks in Hong Kong’s home market and the government will monitor housing policies designed to curb prices, Financial Secretary John Tsang said on Oct. 27.

Hong Kong’s Chief Executive Donald Tsang also promised to provide more affordable homes and signaled greater government intervention in narrowing social inequality in his Oct. 12 policy address, responding to a public outcry over rising prices.

Lau said this year’s transactions aren’t likely to surpass those in 2010 due to the introduction of a special stamp duty last November.

--With assistance from Billy Chan in Hong Kong. Editors: Linus Chua, Andreea Papuc

To contact the reporters on this story: Billy Chan in Hong Kong at bchan101@bloomberg.net; Debra Mao in Hong Kong at dmao5@bloomberg.net

To contact the editor responsible for this story: Hwee Ann Tan at hatan@bloomberg.net


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