Hong Kong residential sales plunge 70% as slowdown intensifies

[HONG KONG] Hong Kong residential home sales plunged 70 per cent in February from a year earlier to a 25-year low as falling prices and economic uncertainty deterred buyers.

"The newspapers keep on saying the market is going down and buyers think they can get a cheaper house half a year later or one year later so are waiting," said Thomas Fok, a property agent at Centaline Property Agency in Hong Kong's upscale Mid- levels West district where he hasn't made one sale this year.

Property prices have declined 10 per cent from their September highs amid uncertainty over the economy at home and in China, possible interest-rate increases and plans by the government to boost housing supply in the next five years. Senior Hong Kong government officials have ruled out relaxing property curbs, which include extra stamp duties and caps on mortgage levels.

Home prices in the city surged 370 per cent from their 2003 trough through the September peak, spurred by low mortgage rates, tight supply of new units and buying from mainland Chinese.

BOCOM International Holdings Co property analyst Alfred Lau has said prices could fall 30 per cent this year.

In February, 1,807 homes were sold, compared with 6,027 a year earlier, according to government statistics.

BLOOMBERG