Sun Hung Kai sees lower sales

Blames government’s extra property measures for glum forecast.

Sun Hung Kai Properties Ltd intends to release HK$32 billion worth of units for sale in the year ending June. Deputy Managing Director Victor Lui had said previously that the company had set a target of HK$35 billion for the period.

On Feb. 22, Hong Kong doubled stamp duty taxes on all properties over HK$2 million and raised down-payment requirements on some mortgages after home prices rose to a record in 2013, defeating attempts to cool an overheated property market.

“Our sales will inevitably be affected by the measures,” Lui said.

Sun Hung Kai reported a lower profit from apartment sales in the six months ended December. It said profit excluding changes in property revaluation dropped 1.9% to HK$11.6 billion for the six months ended Dec. 31.

For the fiscal first half, profit from property sales fell to HK$6.4 billion from HK$7.9 billion year-on-year.

Sun Hung Kai accounted for 17% of all new home sales in Hong Kong in 2012. It sold more than 1,600 units for HK$22 billion in 2012, down from more than 3,000 units worth HK$38 billion in 2011.

Hong Kong’s home prices have doubled since 2008 and have exceeded the previous peak in 1997. A deluge of mainland Chinese buyers, record low interest rates and a lack of new units are being blamed for the unrelenting price hikes.

This has forced the government to impose measures including tightening mortgage lending, imposing higher transaction taxes and pledging to increase supply.

Home prices have risen 5% so far this year despite the government introducing the city’s first property tax aimed at foreign buyers last October.