Residential sales dropped 8% to 4,243 units

After three successive months of growth.

The Land Registry shows that residential sales in July dropped 8% month-on-month to settle at 4,243 units after three consecutive months of growth.

According to a research note from Knight Frank, home prices remained stable thanks to sustained end-user demand. The primary home market has contributed to about one third of total residential transactions. This is where major developers generated good sales in their recently launched projects.

Further, the residential land market has also seen a number of major transactions. Despite the recent pickup in sales, the surge in upcoming supply is expected to suppress growth in home prices. Latest data from the Transport and Housing Bureau suggests that 93,000 new homes will be provided in the coming 3–4 years.

David Ji, Director, Head of Research & Consultancy, Greater China, notes that developers will continue offering deep discounts and competitive mortgage schemes to attract buyers, in order to offload their inventory facing the upcoming US interest rate hike. Luxury home prices could fall 5%–10% this year, and mass residential prices could drop by up to 10% over the year.