Hong Kong Property Prices

Posted by walkup (168 days ago)

SCMP Mar 05, 2008
HK Island shows solid price growth
Overall increases strongest in past three years with Taikoo Shing rising 56 per cent
Yvonne Liu

Home prices on Hong Kong island enjoyed the strongest growth over the past three years with flats in Taikoo Shing bouncing back to 87 per cent of their peak values in 1997.

For the period between 2005 and January this year, average prices in Taikoo Shing rose 56 per cent to HK$7,327 per square foot in January, according to data provided by Midland Realty.

It will not be long before homeowners at the 31-year-old Taikoo Shing see their investment return to the peak level of HK$8,406 per square foot hit in July 1997, as agents expect a 20 per cent to 35 per cent rise in residential prices this year.

The findings are based on price movements of 12 key housing estates on Hong Kong island, in Kowloon and the New Territories, each with four developments polled by Midland Realty.

Of the 12 developments, price performance at Hong Kong Gold Coast in Tuen Mun lags behind rivals.

As of January, the average price at Hong Kong Gold Coast stood at HK$4,204 per square foot, 54.88 per cent below the HK$6,207 per square foot recorded in 1997.

"Taikoo Shing will continue to be the most popular housing estate for the middle class in the next few years," said Wong Leung-sing, an associate director of Centaline Property's research department. The lack of new supply of large-scale mass residential projects on Hong Kong island would fuel further price increases in Taikoo Shing, he said.

Patrick Tsang, senior district sales manager at the firm, said Taikoo Shing was the most soughtafter housing estate in Island East.

"The housing estate recorded 90 to 170 transactions per month over the last four months," he said.

"Kornhill is another popular housing estate in Quarry Bay, but the average transaction volume is only half that of Taikoo Shing."

In January, 90 second-hand flats in Taikoo Shing changed hands.

Location is definitely the key determinant to property prices.

Buggle Lau Ka-fai, chief analyst at Midland Realty, believes housing estates on Hong Kong island outperformed Kowloon and the New Territories due to tight supply.

Besides Taikoo Shing, prices at Dynasty Court in Mid-Levels edged up 46.7 per cent to an average price of HK$14,310 per square foot for the three years to January.

Three out of the four housing estates surveyed on Hong Kong island registered price growth above 50 per cent, while in Kowloon, prices at the Arch shot up 57 per cent to HK$16,438 per square foot.

Prices at Parc Oasis in Kowloon Tong registered slower growth of 36 per cent to an average of HK$7,378 per square foot.

"Parc Oasis used to be the [exclusive] large-scale luxury residential project in Kowloon," Mr Lau said.

"But there has been plenty of new supplies of luxury residential properties in Kowloon in the last few years, thus lowering the growth in prices at Parc Oasis."

Mr Wong said: "Hong Kong's core business district is located on [the island], which attracted the high-income group and expatriates. For example, Residence Bel-Air attracted many expatriates.

"Properties on Hong Kong island have higher investment values. That's why the growth in prices was higher than in other areas."

As a result, he said housing estates on Hong Kong island and luxury residential prices recorded higher growth rates after the property market recovered.

Property prices in the New Territories have been laggards for the past few years.

However, Mr Lau expects mass residential properties in the northwest New Territories to achieve higher increases than other areas this year as transportation and infrastructure have improved over the past year.

"Many people would consider moving to the New Territories as property prices in the urban area have risen significantly in last few years," Mr Lau said.

Looking ahead, he expects prices of mass residential flats will rise 20 per cent to 25 per cent this year, while the growth in prices of luxury residential properties will range between 15 and 20 per cent.

Mr Wong predicted prices at Taikoo Shing, luxury residential projects at Kowloon Station and new upmarket developments in the New Territories would be the star performers this year.

"New projects at Kowloon Station have attracted many potential buyers and residents in the Mid-Levels as there's a lack of new supply there," he said.

"They are looking for units near the central business district and with 24-hour clubhouses, the units at Kowloon Station are their only choices."

He suggested home buyers choose projects which managed to achieve the highest transaction prices in that particular district and were most active in the secondary market.

Willy Liu Wai-keung, a managing director at estate agency Ricacorp Properties, expects prices in Pok Fu Lam, particularly Residence Bel-Air, Quarry Bay, Lam Tin and Tin Shui Wai will have the highest growth this year.

Hong Kong Property chief executive Fredy Wu Yat-fat said properties along railway lines would have the higher growth in prices.

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Posted by Ed (168 days ago)

FYI - coming soon we will have Property News for the HK market - similar to news on the home page...

Posted by DaHKGKid (168 days ago)

Great, this would be great! I'm looking for anyone who has successful received a high ratio 95% approved mortgage and what rate they were able to get.

Posted by MisterD (166 days ago)

We got a 95% package from the developer when we bought ours. Basically comprises of a normal 70% mortgage from the bank, and a 25% loan from the developer, with payments deferred for 2 years. After the 2 year deferment period we paid off the 25% so we didn't need to pay any interest on it leaving us with the normal 70% mortgage which was obviously at normal market rates.

Posted by twirly (165 days ago)

I got a 95% loan from BoC (with about $30K cash back) at 4.775% last June.
Its down to 2.775% with the recent rate drops.

Posted by walkup (159 days ago)

Business WeeK March 14:
Hong Kong's Flu Scare Adds to Property Concerns
The outbreak reminiscent of SARS could curtail the activities of home buyers, resulting in quieter Hong Kong market

by Rita Raagas De Ramos

Although so far contained to affected schools, an ongoing flu scare has brought back memories of Sars.

All kindergartens and primary schools in Hong Kong have been shut down for two weeks starting March 13 because of the outbreak of a flu-like illness, essentially speeding up the start of the children's Easter break. The government decided to issue the order to contain a seasonal flu outbreak and enable experts to look into recent deaths supposedly caused by the virus.

Three children in Hong Kong have so far died with flu-like symptoms, and another child has just been admitted to the intensive care unit in a hospital. Citi notes that on March 12 alone, 23 schools have been affected, with an additional 184 persons getting the virus. In less than a month, about 84 schools in Hong Kong already have been affected, the bank adds.

This flu scare, though so far contained among the schools affected, has brought back memories of the deadly Severe Acute Respiratory Syndrome (Sars) that hit Hong Kong in 2003.

The outbreak could potentially affect the home-viewing activities of homebuyers, resulting in a more quiet market, according to Tony Tsang, a property analyst at Citi. Together with continued weakness in the stockmarket, transaction volume in the secondary market could slow further in March. Sars had a crippling effect on Hong Kong's property market, which took many months to recover.

"With these added uncertainties, bullish expectations of property price increases and transaction volume now built into earnings estimates might not be finally realised, leading to downside in earnings," Tsang writes in a report.

The outbreak is adding to Citi's sell recommendation on Sun Hung Kai Properties and Sino Land. The bank's top pick among the Hong Kong developers are Kerry Properties, which is now trading at 44% NAV discount, and Hang Lung Properties, which has a strong track record of timing the property market.

Tsang has been cautious on the property market in Hong Kong because of increased property supply over the past few months. He notes that supply in the secondary market has increased remarkably with an increasing amount of homeowners and investors releasing their holdings into the market. For example, the amount of units put onto the market for sale in the top 10 benchmark housing estates in Hong Kong has now risen by 29% compared with February levels. Meanwhile, transaction volumes have slowed and individual sellers have softened their asking prices, he says.

Posted by walkup (149 days ago)

Cut in prices boosts Easter flat sales

Reduced unit prices boosted flat sales in the city's primary market during the four-day Easter break.

StephanieTong in The Standard

Tuesday, March 25, 2008

Reduced unit prices boosted flat sales in the city's primary market during the four-day Easter break.

According to real estate agent Hong Kong Property, about 80 units were sold in the primary market during the Easter holidays, compared to 20 to 30 units the previous weekend.

Half of those sold were from Sun Hung Kai Properties (0016) development projects Harbour Green, Noble Hill and Sham Wan Towers.

Harbour Green, located in West Kowloon, was selling at between HK$6,200 and HK$6,500 per square foot, 7 to 11 percent lower than the HK$7,000 psf rate early this year. Sham Wan Tower in Island South was selling at HK$6,500 psf, 7 percent lower than the previous price of HK$7,000 psf. "We did not slash unit prices so as to boost sales. We only offered some kind of special offers. After all, SHK only got about 150 units left unsold," Sun Hung Kai Real Estate Agency executive director Eric Chow Kwok-yin said.

Midland Realty residential department chief executive Jeffrey Ng Chong-yip said that since the Harbour Green units launched were of smaller sizes and at lower floors "it is understandable that prices of this batch of units were lower."

Hong Kong Property chief executive Freddie Wu Yat-fat said reduced price was only one of the factors boosting holiday flat sales.

"Small- and medium- sized developers also launched units, giving buyers more choices and hence lifting flat sales. The Forest Hills of SEA Holdings (0251), for example, sold about 10 units," said Wu.

Meanwhile, about 54 units changed hands in the secondary market, higher than last weekend's sale of 38 units. "Transaction volume increased as flat owners were in need of money. With flat prices soaring in the past few months, many buyers wanted to buy flats before prices continue to rise. Many of them bought new flats before selling the old ones," said Ng.

Posted by walkup (148 days ago)

HONG KONG ECONOMIC TIMES

-- A further reduction in interest rates did not result in a rise in local property sales. The market seems to be entering a consolidation with secondary market prices under pressure for an adjustment.

-- Retailers say sales during the long Easter weekend were down about 20 percent.

Posted by walkup2 (82 days ago)

Interesting CNBC video feed on HK property market:
http://tinyurl.com/5pzezk

Posted by Mr Cynical (82 days ago)

Is the same former Morgan Stanley 'property guru' Peter Churchouse who in 97 just before the crash was unloading his personal portfolio while at the same time as property analyst was calling for the property market to continue its bull run?

Nobody knows what will happen to the property market just like nobody knows what will happen in the stock market. They make educated guesses at best and at worst they, because of undisclosed interests, mislead intentionally.

And anytime you read in the SCMP that the market is picking up, particularly when everything else you hear indicates that is not the case, remember the owner of the post has one of the largest property portfolios in HK.

Go with your gut instinct, mine says the US is going into a major recession, this will impact China dramatically as retail demand in the US slows, and that WILL impact HK property particularly at the high end which is being driven heavily by China money.

Posted by DaHKGKid (82 days ago)

Agree with Mr. Cynical. If you have made money on property and can sell now do it to grab your profits since last fall before this occurs. Again, this is HK, when the first rat jumps they all do. Have your money ready to buy back in during the dip.

In addition to the realistic points above, look at China to somehow mess up the olympics and drive more negative news.

Posted by fel (82 days ago)

but despite all these negative projection, it didnt look like impacting the hk property market much. Prices still remain relatively high at this moment

Posted by Cruz (81 days ago)

Agree with princple of buying on dips - so few people do as they lose confidence when the market loses confidence, which is when you shd be buying.
One of the hurdles you face buying back on price corrections is that lenders are usually also tightening what % you can borrow at the same time in order to protect themselves - so it becomes a viscious circle where lenders wont freely lend, reducing property purchases, pushing down prices further.
Its not happening in HK, but if it does then be mindful you may not get such easy credit as you can now if you are thinking of buying.

Have just heard that you now cannot get more than 70% mortgages from the small number of banks in HK that lend against overseas properties in Aus, UK etc.
With people buying off plan in these markets with low 10-15% deposits that is going to be a problem when they have to find the full 30%, unless the developer is in a position to step in.
If its correct, and I would like to be corrected if not, then this is not good news for overseas property markets. Shd probably be another thread topic.

Posted by HKForGood (79 days ago)

Anyway you look it at, HK apartment prices are currently over-valued. It's no surprise that price rises came to a screaching halt in 2006 when interest rates started to rise (see link below) and have boomed in the last 6-12 months with sharp drops in interest rates.

http://www.globalpropertyguide.com/Asia/Hong-Kong/Price-History

It will certainly be interesting to watch the rats jump ship once interest rates start to rise in the US (and they will).

Posted by DaHKGKid (66 days ago)

Properties in my development, again these are upscale homes 2000-3500 sqft mix have on avg. dropped 5% over the last month prior too the fed in US stating any pressure to raise rates.

Posted by DaHKGKid (55 days ago)

One transaction since Feb 08 whereas this house which sold last week went for 12% lower then ask.

Posted by DaHKGKid (50 days ago)

Another transaction 28th June asking $27.7M, sold for 22.4M around 19% less.

Posted by walkup2 (49 days ago)

2 swallows don't make a summer. Asking prices are not such a reliable indicator as psf against trends in a large block. If you know the psf for a reasonable number of sales say 5-10, then you can compare against the previous similar number. eg for a Centre Stage block I compared the most recent 10 sales against the earlier 10 and this showed a 3.6% drop, but interestingly the most recent 5 showed a recovery so that the down over the earlier 10 was smaller than the later 10 indicated.

Posted by DaHKGKid (47 days ago)

yes walkup2 you are correct as I am focused and posting at a micro level around my plans however in studying previous data from previous slides (1982) in my development there seems to be a trend. Asking vs. Selling prices show simply the agents and owners they are dreaming and I like the wake up call and willing to post.

This again has a completely different result for high density and preferred locals you may be referring to but I do see 10-20% adjustment downward where owners will be stuck putting renters back into their properties when they cannot sell as everyone is waiting for indicators for adjustment and bottoms.

Good Luck to anyone selling right now unless they have owned the property for a very long time, getting out of real estate and waiting for the next big growth market, likely not real estate to invest their cash.

Posted by walkup2 (47 days ago)

I think DaHKGKid touches on an important feature of the housing market, namely the microlevel. Having a feel for a local market is important. One agent is telling me that whereas there is a -5% - -10% adjustment outside, mid-levels owners are currently not prepared to adjust, so the market is slower but holding. He is also reporting (re mid-levels) that no problem in rental lettings >30k and <20k, but some softening in the 20k-30k sandwich area.

Posted by walkup2 (40 days ago)

Transactions drop to 17-week low reports SCMP
Fulton Mak
Updated on Jul 09, 2008
Property sales in Hong Kong's secondary residential market slowed down to the lowest for 17 weeks as the rise in mortgage rate and poor performance of the stock market began to hurt market sentiment, property agents said.

Only 291 units changed hands over the past week in the 50 key housing estates monitored by Ricacorp Property, down 11.8 per cent from 330 units a week earlier.

If the week between February 4 and February 10 - during which the Lunar New Year holiday fell and transaction was traditionally slow - was excluded, transaction volume over the past week was the lowest in 45 weeks.

The transaction volume was also far below the average 479 units over the past 52 weeks.

Nevertheless, average transaction price remain unchanged over the last week.

"The anticipation of rising mortgage rate and the weak performance of the stock market are beginning to hurt homebuyers' confidence in the property market and they now tend to spend longer time in flat viewing," said David Chan, a director at Ricacorp.

"However, sellers generally are staying firm on their asking prices thus resulting in slowing down activities in the secondary market."

Mr Chan believes the poor market sentiment will prevail for some time and transaction volume will hover at about 300 units a week, while house prices may go down 3 to 5 per cent this quarter.

Posted by walkup2 (20 days ago)

Here is the new Centa-City Index compiled by Centadata.
http://www.centadata.com/cci/cci_e.htm
The one property type that is not in the index is old Chinese building apartments which are in smaller units which are not so liquid in turnover and therefore have to be searched for separately.