Everything about Landscope Christie's International Real Estate and the Hong Kong luxury property market

Fresh Impetus

Speaking at the closing of the National People's Congress yesterday in Beijing. Premier Wen Jiabao reconfirmed Central Government's commitment to shore up Hong Kong for its role as an international financial centre.

Premier Wen has pledged that Beijing will implement plans for Renminbi trade settlement in Hong Kong. speed up the mega scale infrastructure construction in connecting the mainland. Hong Kong and Macau. provide more opportunities for Hong Kong's service sector to enter the mainland market by beefing up the Closer Economic Partnership Arrangement (CEPA) and strengthen regional co-operation in the Pearl River Delta including Hong Kong. These measures are expected to elevate Hong Kong to a new platform. which integrates the interests of Hong Kong and its close neighbours. This is particularly essential because amid the world economic recession and the resultant collapse of export trade. on which both Hong Kong and the mainland heavily rely on. Hong Kong's future is tied to its economic integration with the mainland.

The effects of these fresh impetuses may take time to reveal. but they immediately uplift confidence. as reflected in the stock market. An active stock market will provide opportunities for enterprises to amass much needed capital for further investment in the wake of credit crunch. At present. what the economy needs most is the capital flow. Since the collapse of some major US financial institutions. normal financing activities have ground to a halt. Enhanced financial liquidity will boost economic activities including property development and investment. Hong Kong may not benefit from all these instantly but improved sentiment will certainly pave way for the recovery of the market.

Beginning this year. there are some major luxury residential sales. which include 85 Repulse Bay Road (HK$445 million); 8 Belleview Drive. Repulse Bay (HK$150 million); 3B Gough Hill Path. The Peak (HK$180 million); 36A Repulse Bay Road (HK$120 million) and House B. 12-16 Tai Tam Road (HK$110 million). The top end market looks set for a revival. Very recently. there are indications that some banks are beginning to loosen up a bit on corporate lending. This may help ease the tight cash flow. thus encourage more investments. If this credit relaxation extends to the property market. we will not be too far from the bottom. However. it is doubtful how long this relaxed lending policy will prevail as the property market is still jittery after 40% price decline in the last 12 months.

By K S Koh