January 24, 2014 / 10:02 AM / 4 years ago

Hong Kong's private home completions fell to second-lowest on record in 2013

HONG KONG, Jan 24 (Reuters) - The number of private home completions in Hong Kong dropped 18 percent to its second-lowest level on record in 2013 as government cooling measures took a toll on property developers in one of the world’s most expensive home markets.

Analysts said a series of property curbs and new rules that came into effect last April delayed sales schedules and were set to hurt developers’ profit margins as many were forced to offer discounts to lure buyers.

The number of flats being built dropped 18 percent in 2013 to 8,300 units, compared to 10,100 units in 2012, according to Hong Kong’s Transport and Housing Bureau. The number was the second-lowest on record and lower than the government’s previous estimate of 13,551 units.

The figure came just weeks after Hong Kong reported its property sales figures for 2013, which 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.

Hong Kong leader Leung Chun-ying, who has made housing a priority, said last week the government would raise the target for the completion of private units each year over the next five years by 40 percent, to 13,600 from an average of 9,680 over the past five years.

Hang Lung Properties Ltd posted on Thursday a 14 percent fall in full-year net profit for 2013, the first major developer to report declining profits ahead of the earnings season starting in late February.

Rival 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 earlier this month, one of the steepest cuts offered by developers.

The Hong Kong government said on Thursday it planned to re-zone 152 sites, including many greenbelt and community sites in the New Territories bordering China, to build about 215,000 flats over the next five years.

The government has taken a series of steps to curb prices since October 2009, such as higher taxes on purchases by foreigners, increased stamp duties, mortgage restrictions and duties on quick resales.

Overall home prices in the former British territory rose 3 percent in 2013 and have risen 120 percent since 2008 due to the city’s ultra-low interest rates, tight supply and abundant liquidity. (Reporting By Yimou Lee; Editing by Matt Driskill)

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