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

Unexpected Surge

The property market has once again defied gravity. On the back of a strong stock market surge since last March. the property market in general has outperformed other sectors. Primary sales were brisk. a scene not seen for more than a year. Sino Land's Lake Silver in Ma On Shan sold more than 70% of the total units within a week. with buyers queuing up outside the sales office until beyond midnight.

The unexpected strong buying spree is fuelled by the bullish stock market. the influx of hot money and easy mortgage packages. Both primary and secondary markets have seen significantly increased sales. In the luxury property sector. the price jump is even more astonishing. The current prices in Southside. The Peak and Midlevels have returned to their pre-tsunami levels. as if no financial turmoil had happened. It is not uncommon these days that the final sale price is higher than the seller's asking price. In some transactions. the price is back to their mid 2008 level. Many an attractive listings have several contenders that some sellers cancelled the first sale for a second. higher offer by returning the first buyer's deposit with compensation. Property agents cannot be sure of the completion of a deal until it is actually completed. Confirmor sales have more than doubled as if we were back to the speculative era of 1996-97.

Again. one would naturally ask. will this continue. and for how long? There are mixed views of where the market is headed for the remainder of the year. Some expect further price gain in the tone of 5% to 10%; while others see that downward adjustment is just around the corner and by year end we may witness price decline of similar magnitude. I still maintain the view that with rentals continue softening and there is no sign of firming up. sale price cannot sustain for long although in the very short term it may go up further before heading south.

By Claudia Hui