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Hong Kong has worst home sales in 17 months on equities turmoil
[HONG KONG] Hong Kong monthly home sales were the weakest in 17 months in August, as a deepening stock market rout that began in China hurt sentiment among homebuyers.
The city sold 3,896 residential units last month, about one-third fewer than a year earlier, according to government data Wednesday. The value of sales dropped by 26 per cent to HK$31.1 billion (US$4 billion) from a year earlier.
"The investment sentiment wasn't good in the past month," Alvin Lam, a director at the surveying arm of Midland Holdings Ltd, the biggest real estate agency traded on the city's stock exchange, said in a phone interview. "You can tell from the city's falling retail rents, consumption and retail sales.
"Chinese equities have been sliding since mid-June, leading losses in stocks worldwide, amid concerns the nation's economy is slowing. Hong Kong's benchmark Hang Seng Index fell 12 per cent in August.
That is affecting demand for homes in Hong Kong. A day after the benchmark Shanghai Composite Index had its biggest tumble since 2007 on Aug 24, only four of 10 apartments in an auction of government quarters were sold. Ten units were sold at auction in February.
"People have been much more cautious because the adjustment was huge this time," said Mr Lam, who helped the government organize the auction.
"This is a widespread change. The adjustment happened not only in Hong Kong or Greater China, but also in the US and other areas."
Still, prices kept rising. They are up almost 10 per cent this year, according to a private index compiled by Centaline Property Agency Ltd. Midland's Mr Lam said that some buyers have become more cautious. Aspen Crest, the city's latest new home project that went on sale, sold just over half of the units offered on the first day on Saturday, according to the South China Morning Post.