An outspoken estate agent chief was quoted as saying that "the housing market is in an ice age" and he "has no idea when it will end." Let's find out if his bleak outlook holds true.

In November, the total property transactions submitted to The Land's Registry was below 3,800, plunging 21 percent from October. That's pretty disappointing indeed, 25 percent below what was witnessed during the SARS outbreak.

The SHKP said it had sold 140 luxury units over the weekend at its Peak One project launched on Friday in Shatin. The flats fetched an average price of HK$7,000 to HK$8,000 per sqaure foot.

Concurrently on sale is yet another lower-priced project La Grove, targeting the iPod generation. It has been reported that the starter-home project in Yuen Long had recorded over 300 sales in a few days.

Can we jump to a conclusion that both ends of the market are on track to a full-speed recovery?

Let's assume that you believe in recession, which is now under way. Let's also assume that the job cuts reported thus far, which are yet to affect small- and medium-sized enterprises, are real.

The aftermath of the financial crisis in Hong Kong is only beginning to take shape. The SAR's third-quarter GDP shrank 0.5 percent from the previous quarter. Its year-on-year growth was 1.7 percent, well below the projected 2.6 percent.

Purchasing managers' index fell in November to its lowest since SARS in 2003, clearly indicating that the worst is yet to come.

Doubt remains on whether the higher-priced market will get the momentum going, like Peak One's. And much more middle-priced homes in free-standing apartment blocks are in the pipeline for sale in December, including Chinachem's new project in Kowloon City and Henderson Land's in Lai Chi Kok and Jordan.

Trust no one. Stop by Cheung Sha Wan on a Thursday night. Count how many windows with lights on, and you immediately come to know how many flats had been sold at One Madison, One New York and Beacon Lodge. All these projects were launched earlier this year.

Hong Kong developers are seasoned marketers. Anticipating a deeper downturn in the coming six months, it's best to sell it now, and sell it slightly lower than the prices tipped a month before the launch.

Going through property pages, you see crowds browsing through property brochures meticulously presented in shopping malls. You read the news about some investors snapping up a couple of penthouse apartments at record prices. You are told they will be sold out soon.

Discerning homebuyers clearly know that's just the name of the game. Similar news headlines will continue to fill the property section every now and then. Even so, a group of buyers are set to benefit from price declines.

Falling prices in the secondary market and interest rate cuts already make housing more affordable for first-time buyers as long as they can save up a deposit, whereas rich buy-to-let investors or buy-to-sell speculators are discouraged from a bearish market.

This latent demand is already hidden in last two years' marriage registrations, totalling 97,828 new couples, 30 percent and 45 percent higher than in 1996-1997 and 2002-2003 respectively.

The author is deputy managing director of Vigers Asia Pacific Holdings.

(HK Edition 12/03/2008 page3)