HK luxury homes sales climb a notch

Source : Business Times - 7 Feb 2009

Lack of supply, lower prices bolster deals. But analysts think it is too early to say market has stabilised

SALES of Hong Kong luxury homes rose to their highest level in six months in January, indicating that prices may have stabilised, according to a report by Centaline Property Agency Ltd, as buyers seek out bargains.

Completed transactions of existing properties increased 31 per cent from December, and the value of the deals rose 9 per cent to HK$2.7 billion (S$522.8 million), the highest since July, the property broker said on Thursday. Luxury homes are those valued at more than HK$10 million.

A lack of supply and lower prices bolstered sales of existing luxury homes amid a deteriorating outlook for Hong Kong’s property market as a recession hurts sentiment. Prices for luxury homes dropped 19 per cent in the fourth quarter from the preceding three months, Marcos Chan, an analyst from Jones Lang Lasalle, said yesterday.

‘Since the meltdown of the financial markets in the fourth quarter, it’s no surprise to see a rebound after a sharp drop’ in prices, said Mr Chan, head of research for the Pearl River Delta at Jones Lang Lasalle. ‘Most buyers are those with old money and who hardly need to get financing from banks.’

Billionaire Joseph Lau, chairman of developer Chinese Estates Holdings and the city’s fifth-richest man, spent HK$170 million buying a 5,657-square-foot duplex, local newspaper Ming Pao said on Thursday, citing unidentified people. The price is about 16 per cent less than what the seller had paid.

A total of 144 transactions were completed in January, the Centaline report said. The data excludes new properties released to the market last month. January was the second straight month that transactions for existing luxury homes rose, posting a cumulative increase of 82 per cent, Wong Leung-sing, an associate director at Centaline, said in the report. ‘With the lack of new luxury homes, buyers are turning to the second- hand market, rejuvenating activity there,’ he said.

Sun Hung Kai Properties Ltd, Hong Kong’s biggest developer by value, said it expects to fetch HK$50,000 per square foot for its three-storey penthouse units at a new property, the Hong Kong Economic Times reported yesterday, citing a company executive. Buyers from China, Australia, Europe and the US have expressed interest in the pre-launch sale of the property, called The Cullinan, the paper said, quoting Victor Lui, executive director of Sun Hung Kai Real Estate Agency.

Overall, January home sales gained 3.6 per cent from December, the Land Registry said this week.

Still, it’s ‘too early’ to say that the luxury property market has stabilised, Jones Lang’s Mr Chan said. ‘We will continue to see pressure this year, whether it’s luxury or mass market real estate, as there are still uncertainties in the economy and unemployment will shoot up.’