(Bloomberg) -- Hong Kong's new-home sales cooled, another sign of weakness in a property market that may be at risk of a correction.
The transaction value so far in October is HK$11.2 billion ($1.4 billion), the lowest level in 16 months once holiday distortions are excluded. The number of transactions stood at 1,130, down by almost half from the total for all of September, according to the data from Midland Realty.
The sales figures are the first since Hong Kong banks began closing the chapter on a decade of ultra-low borrowing costs by last month raising their best lending rates. Buyers are also stepping back because of unaffordable prices and concerns over the economy, according to Nicole Wong, regional head of property research at brokerage CLSA Ltd.
“The developers tried the tactics of pricing it low, it has worked for a while, but it's no longer working,” Wong said. “Buyers now have to rethink that the cheaper prices are not cheap at all.”
Prices for existing homes have fallen by about 2 percent since the beginning of September, after more than quadrupling since 2003, according to the Centaline Property Centa-City Leading Index.
To contact the reporter on this story: Shawna Kwan in Hong Kong at wkwan35@bloomberg.net
To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Paul Panckhurst
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