According to Colliers International Hong Kong, the city's Land Registry recorded 10,925 transactions in the primary market in the first eight months of 2018, 9 per cent less compared to the same period last year. 

Besides the fewer number of transactions, developers may need to speed up sales by offering more incentives or lowering prices to avoid vacancy tax. 

Hong Kong's biggest developer has been lowering its prices to tempt buyers, as the city's property market shows signs of starting to cool down. 

In light of this, Sun Hung Kai Properties (SHKP) sold all 72 units in the third round of sales at its Cullinan West II development near Sham Shui PO as buyers took advantage of lower prices and mortgage incentives. 

It was also offering first-time mortgages of up to 80 per cent of the flat's value, much higher than the standard mortgage ceiling of 60 per cent of a property valued below HK$10 million (USD $1.3 million), and 50 per cent for those above HK$10 million.

Meanwhile, Colliers reports, Nan Fung Development sold more than 90 per cent of a batch of 487 flats at its LP6 project in Tseung Kwan O. 

With a declining stock market, rising interest rates and a changing pricing strategy of landlords due to vacancy tax, Colliers expect the growth rate of residential prices to slow. However, a shortage of supply should maintain a positive price growth. 

Interest rates are expected to rise by the end of the month, with Hong Kong set to follow any increase by the US Federal Reserve, a move that is likely to dampen demand.

Colliers expects residential prices to increase at a slower pace of five per cent over the course of 2019, compared to an estimated growth rate of 15 per cent YOY in 2018.

Source: Colliers International Hong Kong, South China Morning Post.

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