Home prices fall by half a percent

Drop in prices is first in eight weeks.

The Centa-City Leading Index showed home prices inching downwards by 0.55% last week or the first week-on-week drop after eight straight weeks of gains.

Analysts said the price cooling is the first sign that government efforts to curb soaring real estate prices are beginning to have a meaningful impact. On Oct. 26, the government increased a levy on home sales transactions and imposed a 15% buyer’s tax on purchases by non-residents and corporate entities called the Buyers Stamp Duty.

The Stamp Duty was seen as necessary to help curb foreign cash pouring into the city’s real estate market. Last week’s sales data is the fourth week since the new taxes took effect.

More signs of a cooling were also seen in dwindling transaction volumes. Homes sales on previously-occupied homes were down 50% from the same week a year earlier, according to data by Midland Realty.

Real estate developers appear more focused recently on selling car spaces, an area unaffected by the residency tax.

Cheung Kong Holdings controlled by billionaire Li Ka-shing sold 90 car spaces at one project a few weeks ago, and sold an additional 514 at another real estate project this past weekend.