Residential market in Hong Kong bounces back

Developers in Hong Kong have regained confidence in the market

Hong Kong's residential property sales market bounced back last month as demand for property continued to outstrip supply, according to analysis by Knight Frank.

Transactions were up 65.2 percent month-on-month, and sales volume for homes worth over HK$10 million (US$1.28 million) increased 57.7 percent, reported Property Wire.

The recent Policy Address made by Hong Kong's chief executive put forth numerous measures regarding land and housing planning, aimed at increasing future supply of private and public housing.

Even though long term housing policy is moving in the right direction, new supply will not be available until 2015 or 2016 at the earliest, according to Thomas Lam, director and head of research for Knight Frank Greater China.

"In the short term, demand will continue to outstrip supply, but the government may introduce further tightening measures should home prices surge again. Therefore, home prices are set to remain stable with upward or downward movements within five percent this year," he said.

Transactions in the residential sector are expected to slow down this month during the Chinese New Year celebrations, however, an additional rebound is anticipated from the end of February once the negative impact of recent cooling measures has petered out, according to Knight Frank.

Developers have regained confidence in the market and have been more active in launching primary projects, reported Property Wire.

The Upper West project in Tai Kok Tsui by Kowloon Development was released at market prices and received a positive response.

Other developers in Hong Kong re-launched unsold projects to take advantage of growing purchasing power.

Knight Frank anticipated a surge in supply following the New Year, with new projects like Imperial KENNEDY, Residence 88, The Grace and DUNBAR PLACE are scheduled to launch.

The outlook in the secondary sales market has also shown signs of improvement, with record breaking transactions being registered, according to Lam. Taikoo Shing achieved the record price of HK$20,000 (US$2,579) per sq ft on saleable area.

Some landlords are also becoming more assertive in their asking prices and are unwilling to sell their properties at discounted rates. As a result, fewer units are available and transaction prices have increased.

Article source: http://www.thethailandlinks.com/2013/02/26/residential-market-in-hong-kong-bounces-back/