Taxing times for luxury sectorKaren Chiu  Thursd

"Property developers hope to put extra effort into promotion to boost sales amid a lackluster luxury market, which saw a significant decrease in mainland purchasers," said Donald Fan Tung, executive director of Regal Hotels International Holdings (0078).

Only three luxury homes priced over HK$30 million changed hands in April - worse than the four transactions recorded during the SARS epidemic 10 years ago. Last month nine homes costing more than HK$30 million were sold.

"The current luxury property market is much worse than that in 2003 when SARS hit," speculator Lee Koon-leong said.

"It will continue to be sluggish for at least another three to four years if the government doesn't remove the curbs."

Two years ago, about 50 to 60 high- end sales were recorded per month, with several homes fetching more than HK$100 million each, said Centaline Property Agency director Louis Ho Siu- tong.

The market turned sour after the series of cooling measures imposed by the government. It doubled the stamp duty for properties valued over HK$2 million to up to 8.5 percent in February, following the 15 percent buyer's stamp duty levied on foreign and corporate buyers last October.

As a result, most potential buyers of these expensive

homes - mainlanders and investors - were frightened off, said Midland Realty senior manager Sheldon Wong.

And now, property giants that have developed upscale homes in Southern District or on The Peak can hardly offload units, with the total number of vacant properties available for sale or rent sitting at about 60 - representing total value of more than HK$10 billion.

Among them, Sun Hung Kai Properties (0016) has stockpiled 48 houses.

It only managed to sell one 4,351-square-foot house at its Shouson Peak estate last December for HK$211 million, after the BSD was imposed in October.

Twenty-four houses at a 31-unit project remain unsold, after six were sold during the launch two years ago.

Meanwhile, the company has halted the launch of three other completed developments, including Twelve Peaks on The Peak.

SHKP deputy manager director Victor Lui Ting said the group needs time to prepare following the new law on firsthand flat sales, and the developer will not be rushing to sell the luxury projects.

The new regulations effective on April 29 further hindered new home sales as they require developers to release revised sales brochures and promotional materials to reflect sellable square footage rather than gross floor area of flats in their marketing.

"We dare not put forward new ideas under the new firsthand flat sales law," Fan said, adding about 10 houses at Regal's luxury Regalia Bay project in Stanley remain on the market for sale or lease.

China Overseas Land & Investment (0688) also has eight unsold houses at No 6 Stanley Beach Road.

At the same time, owners of individual luxury homes are forced to reduce their asking prices if they even hope to sell.

Businessman Cai Suixin recently slashed HK$70 million off his original asking price of HK$500 million for his 9,900-sq-ft house at Regalia Bay, but still has not attracted any offers.

Cai, chairman of Loudong General Nice Resources (China) Holdings (0988), bought the house for HK$330 million in 2009.

Another businessman, from Chongqing, similarly has not received any nibbles despite cutting the asking price for his house at No 12 Headland Road in Chung Hom Kok to HK$630 million from HK$680 million.

An agent in the district said it would be virtually impossible to transact any homes in the HK$500 million to HK$600 million range without mainland buyers.

Jacinto Tong Men-leung, veteran investor and chief executive of Gale Well Group, said the BSD has deterred nearly all wealthy mainlanders and corporate buyers from the luxury-homes sector.

Midland Holdings (1200) chairman Freddie Wong Kin-yip said the high- end market can only recover if the government relaxes its measures.