Everything about Landscope Christie's International Real Estate and the Hong Kong luxury property market
Can't Stop the Sliding
Despite the successful sale of Soho 38 in Midlevels Central. the property sales market is still suffering from significant drop in transactions. The more pessimistic outlook of property market has prompted sliding of property stocks in the stock market. which is already long battered by the global credit crunch and slowing major economies.
Luxury property price is softening quietly amid weak demand. Sales in traditional upmarket locations shrank further from July. and more owners have joined the seller side. Some desperate vendors are now slashing price at faster rate. hoping to offload before the winter. However. such effort is not met with buying enthusiasm. as potential buyers are still waiting on the sideline for further fall. It now requires at least 4 to 6 months before a 2.000 square feet flat can be matched with a suitable buyer. compared to less than one month last year. Market commentators said the luxury sector would not be much affected in the same way as the mass market. but the fact is that desperate sellers in this sector are pushing down the price. and the resultant price drop in luxury end may be even greater than the mass market. which has over the years not gained as much compared to its counterpart in the high end. Luxury property represents 7% of the total market stock. and the much narrower base means it is susceptible to greater fluctuations (by the same token. luxury property has higher long term investment value due to limited supply).
The leasing market. though maintained its buoyancy. will soon succumb to the downward pressure stemmed from weakened demand from the financial sector. It will not be too long before we see rental adjustment in various upmarket locations. Get prepared for a long and chilly winter.
By Claudia Hui