Bright Spot

August 15, 2008

The luxury property sales market continued its lull in the summer. There were sporadic transactions in the Southside. nothing significant in value. In Midlevels and Happy Valley. sales were just a fraction of the heyday; and again, nothing exciting. We don't expect to see any significant change in status quo for the remainder of the year.

In the international financial market. gloomy sentiment persists as more financial institutions and enterprises fall victim to the credit crunch. There is no bright spot in the world economy except China. which is however dimmed by its own government's dampening effort on the overheated economy. In spite of Beijing Olympics. China's economy has not had its fair share of financial harvest. The stock markets in Shanghai and Shenzhen continued the slide well below the 3.000 mark which many once believed was the bottom line where the government would intervene to prop up. Property market in major cities including Shanghai. Beijing. Guangzhou and Shenzhen have seen nothing on the horizon to bail them out. With closing ceremony of the Olympics draws near. the market will wake up to a hangover that may last much longer than anybody would want. As Hong Kong's economy becomes more integrated with the Mainland's, local markets are invariably affected by the latter.

The high end leasing market in Hong Kong however has been exceptionally buoyant, especially in the rental range of $60.000 to $100.000 per month, as it is still basked in the glory of the summer and as many potential tenant-buyers have switched back to leasing in the wake of a bearish sales market. The leasing market may defy its traditional seasonal high-and-lows and become the only bright spot in the local property market.

By K S Koh