Busy Summer

July 18, 2007

The stock markets in Hong Kong and China remain in the spotlight, as more money is poured into the region. The property market benefited by way of a spillover from the stock market, as some investors tried to lock up their profit by divesting.

With a lack of major primary sales in the mass market. the secondary market is swamped by eager buyers. However, due to an abundant supply, the increase in demand has not brought about an equal increase of price, which recorded a slight upward movement only. On the luxury front, sales were brisk and there was not much change in transaction volume or buying sentiment compared to last month. Unlike last summer when sales were low due to seasonal factors, this summer has witnessed a very active market thanks to the buoyant stock market and the booming economy. We do not foresee any change in the current direction of the economic growth, so we expect that the property market, especially the high end sector, will continue to prosper in the next 6 to 12 months. The worry is that the imbalance of supply and demand in luxury property market will drive up the price to an unrealistic level too soon, where demand will shrink higher up the scale.

The top end leasing market remains tight, and properties with monthly rentals in the range of $80,000 to $150,000 are particularly sought after, leading to an acute shortage of supply and an ensuing rental rise. With no new properties in this range showing up on the horizon, rentals will continue to soar until mid August when the high season comes to an end.

By Karen Xu