Bloomberg News

Hong Kong’s Developers to Push New Home Sales, Midland Says

December 30, 2012

Hong Kong’s New Rules on Home Area to Help Improve Transparency

A woman walks in front of residential tower blocks in the Tseung Kwan O area in Hong Kong. Builders are embracing for more available land to boost sales. Photographer: Daniel J. Groshong/Bloomberg

Hong Kong builders will sell more new homes next year even as government curbs pushed the number of transactions to a six-year low in 2012, according to Midland Holdings Ltd. (1200), the city’s biggest publicly traded realtor.

Total residential units sold this year probably fell to 82,700, down from 86,000 in 2011 and the lowest since 2006, according to Midland’s estimate. While the number of new home sales probably rose to almost 13,000 in 2012 from 10,500 a year earlier, second-hand transactions fell more than 7 percent to about 63,000.

Hong Kong Chief Executive Leung Chun-ying, who pledged to make housing more affordable during his election campaign, has imposed three rounds of measures to curb home prices since taking over in July, including a plan to increase land supply. Home prices in November had its biggest drop in 11 months after the government levied a 15 percent tax on all foreign homebuyers.

“They’ll still be aggressive,” said Buggle Lau, Hong Kong-based chief analyst at Midland. “They need the funds to replenish land reserve and the government has made it clear they’ll be pushing more land out. We don’t see this changing for a while.”

Builders are embracing for more available land to boost sales. Sites provided by the government in the fiscal year ended 2013 will provide more than 20,000 residential units when construction is completed, Development Secretary Paul Chan said Dec. 24.

Sales Boost

Cheung Kong Holdings Ltd. (1), the developer controlled by Hong Kong billionaire Li Ka-shing, expects to generate home sales of as much as HK$30 billion ($3.9 billion) in 2013, up from the HK$27 billion this year, Anita Fung, a spokeswoman for the company, said by phone.

Sun Hung Kai Properties Ltd. (16), the world’s biggest developer, expect sales volume to fall in the fiscal year ending June from a record in the year earlier, when it generated HK$38 billion from home sales, deputy managing director Victor Lui said in a phone interview.

“You can’t have new record every year so volume will slow down a bit,” he said, declining to provide a target. “We’ll be doing a bit of catch up in the next six months and launching quite a few projects.”

Home prices in Hong Kong fell 2.1 percent from a record in the three weeks to Dec. 2, the biggest drop since January, according to an index compiled by Centaline Property Agency Ltd. The city, the world’s most expensive place to buy an apartment, faces the risk of an “abrupt correction” in property prices, the International Monetary Fund said earlier this year.

Record low mortgage rates, an influx of mainland Chinese buyers and a lack of new housing supply have pushed up home prices, which have doubled in the past four years and surpassed the previous peak in 1997, according to the Centaline index.

To contact the reporter on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net

To contact the editor responsible for this story: Tomoko Yamazaki at tyamazaki@bloomberg.net


Silicon Valley State of Mind
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus