Hong Kong's home prices dipped 1.2%

Is the glass now half-empty for property sector?

According to Nomura, HK home prices fell another 1.2% last week. This now takes the cumulative decline since early March to 4.0% and has now reduced the YTD gain to 2.5%. 

Here's more:

With the intra-year decline now greater than the YTD gain, the glass is now officially half empty. With affordability already stretched and the current demand base thin, we believe these small changes in perspective may hasten home owners’ decision to sell and lock-in their profit and accelerate the pace of the correction. We continue to expect home prices to give back this year’s gains and reiterate our cautious stance on the HK property market.

 Physical market: The CCL Index dropped 1.2% w-w to 118.71 with home prices falling across the regions. Developers sold 95 units over the past weekend before the new pre-sale rules takes effect, while secondary volume remained light.

 Best and worst: HK property stocks increased 1.2% w-w last week, underperforming the Hang Seng Index (+2.4% w-w), but outperforming their China peers (-1.3% w-w).

 Buyback/stake changes: Stake increases by Mr Lee Shau Kee in HLD (+1.253mn shares).

 FY13-15F consensus earnings estimates: Developers (+0.2%/+0.1%/ -0.3% w-w), landlords (0.0%/+0.1%/+0.3% w-w) and REITs (0.0%/+0.1%/0.2% w-w).