Published December 1, 2009

HK weekend home sales down 16%

Concerns over Dubai crisis holding back buyers

(HONG KONG) Hong Kong's weekend home sales fell 16 per cent at major developments as concerns about Dubai World's debt prompted buyers to slow purchases, Centaline Property Agency Ltd said.

Residential transactions at Hong Kong's 10 biggest developments dropped to 32 between Nov 28 and Nov 29 from 38 the prior weekend, Louis Chan, general manager of residential properties at Centaline, said by phone yesterday .

'Since the global financial crisis erupted last year, buyers have become more wary of any adverse news coming from the financial markets,' Mr Chan said.

Concerns about Dubai World's attempts to reschedule its debt last week also affected sales at Cheung Kong (Holdings) Ltd's Le Prime residential project, Mr Chan added.

Markets from Asia to the United States fell last week after Dubai's state-owned investment company sought a 'standstill' agreement to delay repayment on much of its US$59 billion of borrowing.

Hong Kong's Hang Seng Index fell 4.8 per cent on Nov 27, the most in eight months, led lower by bank shares. The Hang Seng Index finished yesterday's session with a gain of 3.25 per cent after the central bank in the United Arab Emirates on Sunday pledged support for banks in Dubai.

Hong Kong home prices have surged more than 30 per cent this year, according to Centaline, as record low interest rates and a rebound in the local economy help fuel demand for housing.

The rally has prompted the government to limit lending for luxury apartments, and suspend mortgage insurance for rental properties.

Hong Kong recently said it would clamp down on sales tactics that had been criticised by lawmakers.

Developers selling uncompleted homes will have to quote prices per square foot based on the usable space as opposed to the previous practice of including a proportion of common areas on the square footage. -- Bloomberg