* Number of transactions down 39 pct in 2013 vs 2012
* Deals value down 30 pct from a year earlier to $59 bln
* Forecasters see home prices falling this year
(Updates to add comment from property developers and analysts)
By Yimou Lee
HONG KONG, Jan 7 The number of properties sold
in Hong Kong fell by more than a third last year to a 17-year
low as a surge in sales tax, designed to burst a price bubble,
turned off buyers in one of the world's most expensive cities.
Despite steep discounts offered by the city's influential
property developers, the total number of sale and purchase
agreements concluded in 2013 was 70,503, down 39 percent from
2012, according to the Hong Kong Land Registry.
The value of deals dropped 30 percent from a year earlier to
HK$456 billion ($59 billion) and forecasters expect the downturn
to continue this year. With local tycoons like Li Ka-shing
warning of the impact on his property business last year, in
November Deutsche Bank said Hong Kong home prices could drop up
to 50 percent over the following 12 months.
Last February's doubling of stamp duty, or tax, on
residential transactions to as much as 8.5 percent of the sale
value was designed to prick the city's property bubble. But it
has yet to stop the price of homes creeping up: according to
property services firm Centaline Property, overall home prices
edged up 3 percent for the year, and have jumped 120 percent
That could change soon, making life tougher for the property
"Since the new measure is still there, I don't believe
the worst is already over," said Ricky Poon, executive director
of residential sales at real estate services firm Colliers
International in Hong Kong.
"Developers will have less and less in profit margins.
That's for sure," Poon said. He forecast mass-market home prices
will drop up to 20 percent in 2014.
Li's Cheung Kong (Holdings) Ltd, the city's
second-largest developer, offered price discounts of up to 25
percent for a new residential home development launched last
weekend, one of the steepest cuts seen since new sales rules
came into effect last April.
PRICE CUTS AHEAD
Despite predictions that the property market will remain in
the doldrums for some time, Cheung Kong put on a brave face this
week. It predicted prices could rebound by up to 10 percent amid
a positive response to new housing developments.
"The worst is over for the city's housing market. You can
see from the strong sales responses for the recent new project
launches," Cheung Kong's executive director Justin Chiu
Kwok-hung was quoted as saying in daily paper the South China
Analysts see little sign of that, instead forecasting
further pressure on developers to lower prices as new home
construction projects are completed.
"There is zero chance that property prices will go up this
year," said CLSA property analyst Nicole Wong, adding that
developers had already been forced to price homes in newly built
properties some 20 to 30 percent below those for sale in older
"In 2014 there will be pressure to cut prices further for
inventory clearance," Wong said. Supply for new homes may
increase by up to 85 percent in 2014, she said.
In a reflection on the scale of last year's slowdown, last
November tycoon Li said his property business had suffered its
worst year in more than a decade.
Major rival Sun Hung Kais Properties Ltd in
September posted a 14 percent fall in full-year underlying
profit for 2013, trailing forecasts and marking its first drop
in annual earnings due to slow sales in Hong Kong.
Prices in the former British colony remain among the highest
in the world. While Hong Kong first began taking steps to cool
property prices in October 2009, no real impact had been seen
until the February increase in stamp duty on residential
($1 = 7.7547 Hong Kong dollars)
(Reporting By Yimou Lee; Editing by Anne Marie Roantree and