Whiff of speculation in homes market amid confirmor sales

Staff reporter

Confirmor sales reappeared among homes with low price tags, raising concerns that property market speculation could make a comeback as homebuyers rushed to buy after the lifting of property curbs.

A confirmor sale occurs when a buyer enters into an agreement for the sale and purchase of a property with the owner but before completion sub-sells the property to a sub-purchaser, usually at a higher price.

A high-rise 415 square-foot flat at Siu Hei Court in Tuen Mun was to be sold at HK$3.08 million, however the buyer immediately put it on sale for HK$3.38 million after the government scrapped property cooling measures. It is expected that the buyer will make a profit of more than HK$200,000 after fees.

Another confirmor deal came from a low-priced unit at Tsuen Wan Center. Dubbed "Paradise of Speculators," the housing estate reported that a home of 329 sq ft sold for HK$2.88 million on Wednesday, even though the holder raised the asking price by HK$80,000.

Previously, the homeowner at the Tsuen Wan Center trimmed the reserve price to HK$2.8 million but there were no takers.

On Wednesday, the cooling measures introduced in 2010 were removed as expected, including the special stamp duty which was designed to charge the owners at least 10 percent of the property value if they sell them within two years.

Three transactions were made at City One Shatin that evening and more deals in different districts before the weekend, when transactions are usually made.

With all curbs gone, people who speculate homes valued at HK$3 million or below only need to pay HK$100 for stamp duty, which makes the low-priced units popular among speculators.

However, price cuts continue in the secondary market.

A flat of 427 sq ft at a housing estate on Lung Cheung Road in To Kwa Wan was sold for HK$5.53 million, 10 percent lower than the asking price before the removal of housing curbs.

The owner, who remained pessimistic about the market, suffered a paper loss of HK$970,000.

Smaller developer Wang On Properties revised its price list for its new project The Phoenext in Wong Tai Sin yesterday, to offer discounts of as much as 27 percent, attempting to sell out the units as soon as possible.