Homebuyers back turning market bullish
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Home sales rebounded strongly over the past week, a sign that would-be buyers are turning more bullish about the property market outlook.
Volume of home transactions in 35 key residential real estates in the city stood at 138 last week, up 146 percent from 56 in the previous week — the highest number in five months since September, a report by Midland Realty released on Monday shows.
Data released by the city’s largest real estate broker Centaline Property Agency Ltd on Feb 5 shows 42 home transactions were sealed in the city’s 10 key residential properties during the weekend, compared with 11 closed deals a week earlier, which is also the highest record during the past 47 weeks.
Most homes that shifted hands were small-to-medium sized apartments located in Kowloon and the New Territory areas, the real estate agencies said.
Home transactions dropped tremendously since July and investors have been waiting since then for another entry point, said Patrick Chow, Ricacorp Properties head of research.
“The vast market demand suppressed by the declining prices since the mid-2011 was eventually released last week as the government didn’t initiate more measures to curb the property market,” said Chow.
During the budget speech on February 1, Financial Secretary John Tsang, without imposing any further curbs, announced that Hong Kong government will continue to boost land supply in a bid to maintain a healthy property market. It will provide residential sites good for 30,000 private homes in the new fiscal year over the 20,000 units estimated for the current fiscal year.
However, despite a rise in home supply over the next years, most new sites that the government is offering is not in the downtown area, and the market may anticipate that home prices of these key places will continue to climb in the future, according to Charles Chan, managing director of Savills Valuation and Professional Services.
Both Chow and Chan told China Daily that they expect further growth in home transactions in the next few weeks as market sentiment is turning softer.
However, Ricky Poon, executive director of Residential Sales from Colliers International sees the sales rebound as being more “temporary” as the broadened bargaining power in a price-declining situation may also boost sales for a short period.
“But current transaction volume is still well below the long-term average,” Poon said, pointing out that prices of small-to-medium sized apartments in Hong Kong may decline more in the next two or three years when the new mass supply eventually arrives.
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