Drumming Up

April 20, 2007

The primary sales market has recently stolen the limelight. with robust sales reported on all fronts from Hong Kong Island to the New Territories. and from small flats to large units. The long Easter holiday was a timely breather for the second-hand luxury property market, which had been charging ahead at full throttle for three months following the record land auction last December.

The traditional high season of primary sales market once again arrived in time after Chinese New Year. Sales transactions were brisk during the Easter holiday, as developers were all drumming up sales campaigns in concert with the stock market frenzy. The wealth effect and high spirit across the board helped fuel the buying spree in the property market, and developers found their unsold stock snapped up quickly for the first time in the last six months. That provided room for price uplifting and sellers were swift to exploit the situation. Undeterred by the new price, buyers filed in to take position in the more popular developments as well as the lesser well-known alternatives. Such bullish sentiment spread to other parts of Hong Kong on the heels of brisk sales and the first-hand market in the New Territories witnessed its share of booster.

On the other hand. the luxury property sales market on Hong Kong Island had a quiet spell, due largely to the long Easter holiday and also partially to the fact that buyers needed more time to digest the daily updated price, which recently gathered its speed of escalation. There were fewer notable house sales than a month ago. and these included House 3B at 3-5 Gough Hill Path for $180 million ($31.800 per square foot) and House D at 110 Repulse Bay Road for $110 million ($18,000 per square foot). The niche market will not resume its quick sales as experienced in the past few months because availability is shrinking therefore owners with remaining stock find themselves in a more advantageous position to raise price tag.

Furthermore, the leasing market is warming up to the advent of summer. Multinational companies have also been more generous with their housing budget for senior executives and properties with monthly rentals north of $100,000 are noticeably matched with tenants more swiftly, leading to a mild supply shortage. It is anticipated that this shortage will aggravate as we enter into May and June, when arrivals will reach a peak. For many leasing agents. business in May through July may account for 50% of the year's turnover and there will be no exception this year.

By Karen Xu