Homes sales in Hong Kong dropped to their lowest level in over two years in April, as increasing mortgage rates and government curbs fuelled concern that a two-year price surge may come to an end.
The number of transactions fell by 37.6 percent to 7,635 homes in April, the lowest since March 2009, according to a Land Registry website.
The value of the transactions dropped 26.8 percent from the previous year to HK$39 billion (S$6.17 billion), the largest annual drop since June 2010.
Meanwhile, home prices in the city increased by more than 55 percent in the past two years, due to the influx of home buyers from China and record low mortgage rates.
Last November, the government increased property transaction taxes and pledged to increase land supply, as the central bank, amid public protests, warned of an impending “credit-fuelled property bubble” and that home prices are becoming unaffordable.
The government plans to sell nine sites in the second quarter, which will produce 2,650 apartments. It is also considering announcing a land sale at the start of each quarter, according to Financial Secretary John Tsang.
He added that for this year alone, the city may auction up to 52 plots of land, which could yield 16,000 units, approximately 80 percent more than those yielded from land sold in the previous year.
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