HK Sales Fall With Fewer Luxury Apartment Deals

Source : The Business Times, May 6, 2008

(HONG KONG) Hong Kong's home sales fell the most by value in 18 months in April as the market for higher- priced apartments cooled, according to government data.

Cooler market: Home sales revenue declined 30% from a year earlier to HK$27.6b last month, after gaining 49% in March - the biggest drop since October 2006

Revenue declined 30 per cent from a year earlier to HK$27.6 billion (S$4.8 billion) last month, after gaining 49 per cent in March, the Land Registry said yesterday on its website. The drop was the most since October 2006. April sales fell 26 per cent from March.

'High-end properties have cooled and dragged transactions down dramatically,' Kevin Lai, senior economist at Daiwa Institute of Research here. 'Speculators are more cautious because of the financial turmoil. Plus, luxury prices have gone up quite a lot in the past year or two, so a correction isn't unusual.'

The price of dwelling units with a floor area of at least 1,000 square feet (one definition of luxury housing in Hong Kong) gained 26 per cent in the 12 months through February, according to real estate agency Colliers International.

The mass market, of smaller apartments, is still 'pretty healthy and well supported' because of low interest rates and rising family incomes, driven by Hong Kong's improved job market, Mr Lai said in a phone interview yesterday.

The number of units that changed hands in April was 9,047, down 5.1 per cent from a year earlier and 5.3 per cent from March, the statement said. -- Bloomberg