The Lunar New Year holiday has passed, but the property market is still uncertain. The “Indian summer” of the property market did not appear. In the past, the first-hand property sales were always to initiate the “Indian Summer” after the holidays, but this year is not as good as it was before. At present, the second-hand property sales stand alone to support the overall property market. Unfortunately, the market sentiment was sluggish, and the transactions were sparse. As a result, the fewer transactions volumes caused the lower the transactions prices. Inevitably, second-hand property prices hit the record low.
Last week, rarely recorded zero transactions. Observing the latest transactions, three major housing estates’ transactions prices had suddenly been plummeting 13% to 21%. This huge drop in price is the deep worry of the public.
Recently, the transaction price of a two-bedroom unit in City One Shatin suddenly dropped from HK$ 12,666 to 10,336, a sharp 
drop of 18%. As for Kingswood Villas in New Territories, the price of a two-bedroom unit also decreased from Hk $7,512 to 5,882, a steep fall of 21%. In Kowloon, the price of a two-bedroom apartment in Laguna City also decreased by 13% from HK$11,219 to 9,723, a sudden drop is 13%. On the other hand, many other housing estates transactions prices also fell by more than 5%.
The prices of second-hand property have been plummeting, which eventually will suppress the sales prices of first-hand property to a lower position. If first-hand property sales prices are priced too high, it will be difficult for the developers to cut down their inventories.
The best way to ensure the good sales records of first-hand property are to set the sales prices which are comparable to the transaction prices of second-hand property in the same district. By adopting this sales tactic, the customers who originally wanted to buy second-hand property may turn out to be true buyers of first-hand property.
Therefore, the later the new properties are opened for sales, the less flexibility of its sales tactics will be. In this situation, the sales prices of first-hand property will be forced to reduce in line with the sudden drop in second-hand properties’ transactions prices, which is extremely detrimental to developers who are eager to slash down their inventories.
