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Everything about Landscope Christie's International Real Estate and the Hong Kong luxury property market
All Set For A Rise
After a short lull following the Chinese New Year, the luxury property market is quickly gathering momentum for another surge, as evidenced by increased enquiries and property viewings beginning this week. Market optimism is underpinned by the negative interest rate, the healthy economy and the fact that the tight supply situation is not going to change for a long while, as the government steadfastly maintains its high land price policy.
Property prices are edging up every day. and each marginal increment soon adds up to a significant rise that when one looks back to just last October, the prices then are like history of long time ago. Sellers today are putting up prices that can only be justified by a corresponding increase in buyers’ financial strength. Nevertheless. buyers are undeterred; because for many of them. they are just re-investing what they had profited from the recent stock market rally. With inflation gathering speed and stock market in the doldrums, there’s not much choice left to park their capital. After all, Hong Kong’s luxury property market has always been an excellent investment arena.
The government will release its financial budget soon and will likely dish out generous goodies to the public including individuals and corporations. This will certainly add fuel to the consumer market and investment market. Real estate will definitely be a main target for investors looking for opportunities. Last year, the market had witnessed its lowest annual supply of residential units in the last 36 years; and the supply in 2008 and 2009 will not have substantial growth due to the fact that very limited land was released to the market in the last four years. So the scene is set for another property rally. The top end properties are now priced at 150% to 200% of their 1997 (the last peak) values, whereas the small flats are only 60% to 70% of their 1997 values. With a healthy and growing economy and a negative interest rate environment, small flats are set for a significant rise this year.
By K. S. Koh