HONG Kong's existing home sales fell last week as the start of offers by the new Palazzo development sapped demand from buyers for used apartments, Bloomberg News reported.

Thirty-five of Hong Kong's biggest private developments recorded 150 sales of existing residences between May 12 and Sunday, down from 178 a week earlier, said Midland Holdings Ltd, the city's biggest listed real estate agency.

Sino Land Co has sold almost 70 percent of the new apartments at the Palazzo in the city's Shatin District over the first nine days since sales started on May 9, Sing Tao Daily reported on Monday. Cheung Kong Holdings Ltd will begin offering apartments this week at its Celestial Heights project in the Ho Man Tin district near Kowloon in central Hong Kong, Bloomberg News said.

"The secondary market will probably remain quiet for a while," said Buggle Lau, chief analyst at Midland. "If sales at these new projects are good then sentiment for the whole market will improve and buyers of existing homes may move in as well."

Sino Land, Hong Kong's fifth-biggest developer, has risen 5.7 percent since sales began at Palazzo, outpacing the 2.7 percent advance in the benchmark Hang Seng Index. The stock fell 6.3 percent to HK$19.96 (US$2.56) at 3:17pm, the biggest decline in more than two months.

Cheung Kong, billionaire Li Ka-shing's flagship developer, has risen 7.5 percent during the same period. It fell 3.1 percent to HK$126.50. The six-member Hang Seng Property index fell 3.5 percent, outpacing the 2.5 percent decline in the wider Hang Seng benchmark.

Hong Kong developers begin selling apartments while they are being built.

April home sales declined 5.1 percent in volume and 30 percent in value compared with a year earlier.