Hong Kong builders will put the brakes on home sales for the rest of the year after government curbs to rein in prices sapped demand, according to Bocom International Holdings Co. and Centaline Property Agency Ltd.
Builders including Sun Hung Kai Properties Ltd. (16) and Cheung Kong Holdings Ltd. (1) sold about 4,320 new units for HK$40 billion ($5.2 billion) in the first half, both the lowest since the second half of 2008, according to figures compiled by realtor Centaline. A total of 7,183 units were sold for HK$66 billion in the second half of 2012, Centaline said.
Developers are holding off sales after property transactions in the city plunged to a two-decade low in the second quarter in response to a doubling of stamp duties on buyers and sellers, and tightened regulations on marketing material of new apartments. Home prices have dropped 2 percent from a historic high in March, after having more than doubled since early 2009.
“The pace of sales will remain slow unless there’s something encouraging developers to turn over assets faster,” Alfred Lau, Hong Kong-based analyst at Bocom International, said by telephone. They have “little incentive to sell at a time when the market’s down.”
Hong Kong Chief Executive Leung Chun-ying, in February, doubled the stamp duty on properties costing more than HK$2 million and targeted commercial real estate. Since taking office a year ago, he also has imposed taxes on non-resident homebuyers and pledged to increase housing supply to bring prices down to more affordable levels.
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