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Home Sales Soar as Buyers Shrug Off Flu
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May 17, 2009 |
Buyers shrugged off concerns over the
outbreak of the swine flu and turned out in
force to drive deal-making in the secondary
market up by about 50 per cent last week.
Data collated from 50 large housing estates
monitored by Ricacorp Properties shows
transactions rose 49.16 per cent to 443 for
the week, compared with 297 recorded in the
previous week. Average transaction prices
edged up 0.4 per cent week on week.
The turnout of buyers was welcomed by agents
who feared that prospective buyers could
turn cautious because of the outbreak of the
flu virus.
David Chan Tai-wai, a director at Ricacorp,
said the sales performance suggested there
was no widespread concern, while the wealth
effect owing to the rising stock market also
gave the market a lift.
In the primary market, sales totalled about
100 units over the weekend, largely because
new mortgage plans launched attracted
buyers.
Along with improving transactions, average
home prices in the secondary market have
increased 11.1 per cent since the beginning
of the year, the Centa-City Leading Index
shows. But analyst Nicole Wong urged
caution about the present recovery.
The rebound in prices and deals was partly a
reaction to the very sharp price declines
within a short period in the fourth quarter
of last year, which could be expected to
trigger bargain hunting, said Ms Wong, who
is head of Hong Kong and China property
research for investment bank CLSA. For
the foreseeable future property prices would
remain at current levels at best, Nicole
Wong urged caution about the present
recovery.
"Without economic or job market expansion,
residential rent - which is almost a pure
proxy of income - will stagnate at best,
fall at worst," Ms Wong wrote in a report.
Given the backdrop of a bottomed-out
mortgage rate, she believes that investors'
tolerance of falling rental yields may not
last long should property prices continue to
climb while rents remain stagnant or even
fall. Therefore buying interest would
eventually lose steam, ending the rally.
Source: South
China Morning Post |
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