Hong Kong property transactions slump 33pc in February as investors wait for market to stabilise

Property sales in Hong Kong plunged more than 30 per cent year on year in February as investors and homebuyers stayed on the sidelines, unsure whether prices were likely to fall further.
A total of 5,002 property transactions for flats, offices and car parks worth HK$41.9 billion (US$5.3 billion) was reported last month, down from HK$62.6 billion in February 2018, according to data from Centaline Property.
"Investment sentiment was still quite sour in February, and buyers were reluctant to make a move," said Derek Chan, head of research at Ricacrop Properties.
Data from mReferral Mortgage Brokerage Services showed that the number of loan applications last month for lived-in homes fell 20 per cent to 6,791 and for new flats it dropped 18.1 per cent to 998.
"Homebuyers tend to take a wait-and-see attitude after seeing flat prices decline for several months," said Sharmaine Lau, chief vice-president at mReferral.
But the slowing market has, if anything, seen developers double down on marketing of new projects to shore up revenue.
Sun Hung Kai Properties, Hong Kong's largest developer by market value, and New World Development, the fourth largest builder, are expected to release more than 3,600 units over the next six months.
Late on Friday evening, Magic Sight Holdings, a private developer, released the second batch of five units at its development in Sham Shui Po for sale.
Two of the five units at the 160-unit AVA 228 development are 129 square feet each. These are the tiniest flats in Kowloon, and are being offered for as low as HK$2.57 million after factoring a discount of as much as 12 per cent.
Only 48 out of 82 flats have been sold since its launch last Friday. These are the cheapest flats on sale since July 2016, when a 253 sq ft flat at property developer Nan Fung Group's Ori development in Tuen Mun was sold for HK$1.9 million.
But market observers say that they have seen signs of a stabilising market in January.
Transactions of lived-in homes jumped from 58 in the week of February 4 to 134 deals in the week starting February 18.
"The sentiment has changed very fast," said Nomura analyst Joyce Kwok. "Now we see that as the Fed has softened its attitude on interest rate increases, the mortgage pressure is not as large...