Everything about Landscope Christie's International Real Estate and the Hong Kong luxury property market
The stock market frenzy continued and pushed the Hang Seng Index to historical high. The capital-driven rally seems to have gathered huge momentum, inundating the stock market with cash. This has depressed the inter-bank lending rate to low levels, and banks are awash with surplus capital. The HSBC group has therefore slashed its prime lending rate, and other banks quickly follow suit.
The property market has yet to benefit from the overspills of the hot equity market. The glut of unsold units at 65.000 dampens developersâ€™ ability to raise prices, despite extremely low new supplies this year and the next. Most developers would have to soften selling price in the range? of 15% to 20% to attract buyers but the market response is only lukewarm. So far, reduced interest rate seems to have no material effect on the mass property market.
On the other hand. the luxury property market fared better. due largely to the chronic shortage of supply in traditional areas like the Southside. the Peak and the Midlevels. Buying spree in these upscale locations shows no sign of abatement. The buyers are invariably people who have substantially benefited from the economic boom, especially those paid with fat bonuses in the financial industry and related professionals like accountants and lawyers. In the top end market. mega sales mushroomed in the house sector, Severn 8 on the Peak fetched high prices defying market speculation, with most sales prices breaking the $100 million mark. Houses in Southside also recorded brisk sales, such as 12-16 Tai Tam Road, Carmelia and 1 Shouson Hill Road East.
The capital parked in Hong Kong is tipped to stay for a while, as market speculation of a stronger Renminbi rekindles. This will certainly underpin the equity market and itâ€™s not surprising to see index breaking records again. However, whether this will breathe new air to the general property market remains to be seen.
By Michele Tang