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Old September 11th, 2007, 06:39 PM   #1
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HK Property Trends

As a forummer who contributes to Singapore and Macau threads, thought I'll start a thread talking about property trends/prices in my hometown, HK, particularly as there seems to be a pickup in property market.

Here's a few articles about recent property markets...

MARKET TALK: Midland +5.2%; Ppty Deals Hit 27-Month High 2007/09/05
1118 [Dow Jones] Developers continue recent outperformance with subindex +1.5% vs HSI +1.0%; estate agent Midland (1200.HK) stands out, +5.2% at HK$5.72, probably on extra boost from land registry data reported by The Standard showing August property transactions hit 27-month high, (+24.9% on-month at 11,480 units, +27.9% at HK$36.8 billion in value terms), underpinned by HK's robust economic growth. August numbers primarily driven by transactions in secondary market with Midland's own data showing secondary market deals last month reached 10,077 units, also 27-month high. Midland net profit tipped at HK$246 million this year, HK$291 million next, according to Thomson Financial average estimates; may suggest valuations unappealing vs market cap of HK$4.17 billion, but positive earnings surprise quite likely given trend, especially if U.S. cuts rates later this month; HK rates generally move in line with U.S.

MARKET TALKevelopers Outperform;30% Upside In Ppty Prices-BS 2007/09/03
1051 [Dow Jones] Property sub-index down 0.3% but manages to outperform HSI's 0.6% decline on profit-taking, on hopes of U.S. interest rate cut later this month. Bear Stearns advises to Overweight HK developers, tips up to 30% upside in residential property prices in next 12-18 months, underpinned by rising household incomes, positive wealth effect, declining real interest rates, rising rental costs. Meanwhile, housing completions will decline considerably in coming years on lower land supply. Top sector pick is Sino Land (0083.HK), which among major HK developers has highest exposure to upside in property prices; stock rated Outperform with HK$21.95 target. Sino bucks trend, +1% at HK$18.42.

MARKET TALK: Developers Strong; Good Hedge - Macquarie 2007/08/31 15:35
1516 [Dow Jones] HK property stocks "a good hedge whatever way the world turns," says Macquarie; likes HK developers with valuations remaining very reasonable, being natural beneficiaries if U.S. starts easing interest rates, sector also eventually going to be major beneficiary of increased Chinese capital flowing into HK. "To our mind, the sector represents a very good hedge between the buoyant Chinese liquidity story and global risks." Property sub-index +2.2%, outpacing HSI's 1.9% rally: SHK Properties (0016.HK) +3.2% at HK$103.60, Cheung Kong (0001.HK) +2.1% at HK$114.40, Hang Lung Properties (0101.HK) +2.9% at HK$28.35.
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Old September 11th, 2007, 06:59 PM   #2
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We already have a property news thread in this section :
https://www.skyscrapercity.com/showthread.php?t=121643
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Old September 11th, 2007, 07:12 PM   #3
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Quote:
Originally Posted by hkskyline View Post
We already have a property news thread in this section :
https://www.skyscrapercity.com/showthread.php?t=121643
Sorry, didn't find it... Maybe this tread should be a 'discussion' more rather than news ???
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Old September 14th, 2007, 03:57 PM   #4
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Sales Surge Fuel Bull Run Hopes
Headline, SCMP, Property, 17 Sept
see https://www.skyscrapercity.com/showth...5#post15349265

Are we really about to be on a bull run. Up 30% by end of next year ???
I think it will be quite positive, maybe 20-30%, given economy, negative interest rates (with maybe 50bp cut next week), low unemployment, China money (this seems to be a possible major event)
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Old October 16th, 2007, 12:22 PM   #5
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MARKET TALK:Developers Dn;But LB Stays Positive On Ppty Sector

2007/10/16 11:13

1102 [Dow Jones] Hong Kong developers down on profit-taking after recent sharp gains, with Hang Seng Property sub-index down 1%. Lehman Brothers stays positive on Hong Kong's property sector though, says yesterday's better-than-expected land auction results will push up residential property prices; tips residential property prices in city to rise 16% by end of 2007, followed by another 25% by end of 2008. Sino Land (0083.HK) off 1% at HK$20.80, Cheung Kong (0001.HK) off 2.4% at HK$134.10 and Henderson Land (0012.HK) down 0.8% at HK$60.95. (JNL) Contact us in Hong Kong. 852 2802 7002;
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Old October 16th, 2007, 12:31 PM   #6
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Two Lots Sold in Hong Kong Land Auction

Hong Kong 15 October 2007: Two government lots were sold for a total of 6.192 billion HK dollars at a public auction held by the Lands Department Monday afternoon.

The two sites of Aberdeen and Cheung Sha, Lantau Island, went to K. Wah International Holdings, Nan Fung Group and Sino Group respectively at HKD8,285 per sq.ft. and HKD6,749 per sq.ft..

According to Mr. David Cheung, Executive Director of Vigers Appraisal and Consulting - Hong Kong Operation, "The result of the auction was better than market expectation by 20-30%, reflecting the developers' confidence in growth of Hong Kong property market."

Cheung forecast that the properties on respective sites would be sold at HKD12,000 per sq.ft. and 10,000 per sq.ft..
Vigers
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Old October 26th, 2007, 07:13 AM   #7
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MARKET TALK:HK Developers Strong;HK May Follow Possible US Cut
2007/10/25 15:08
1455 [Dow Jones] Developers extend gains in afternoon with property sub-index now +3.9% vs HSI +0.3%: SHK Properties (0016.HK), Cheung Kong (0001.HK), Henderson Land (0012.HK), Sino Land (0083.HK) each up at least 4%. Sector strength due to expectations U.S. Fed may ease again next week; "recently the Hibor has been pulled higher, but that's mostly due to Alibaba.com (1688.HK) IPO," says YK Chan of Phillip Asset Management; if U.S. cuts interest rate again, HK likely will follow, further fueling already heated-up sentiment towards physical property market. Among blue-chip developers, Hang Lung Properties (0101.HK), New World Development (0017.HK) relative laggards, each up by about 1%, may play some catch-up.

MARKET TALK: NWD, SHKP, Sino Land Top Sector Picks - UBS
2007/10/24 15:27
1515 [Dow Jones] Apart from HK property supply shortage, UBS notes overall rents rose 10% in January-September, with median top-10 estate rents +14% on-year; says is "upside risk" to 20% rent rise forecast for 2007-08, which "should provide a good yield to support prices." Further, notes robust employers' hiring intent despite nearing fiscal year-end. All of these factors bode well for HK property market outlook; top picks remains New World Development (0017.HK), SHK Properties (0016.HK), Sino Land (0012.HK). Property sub-index +0.6% vs HSI +0.3%

2007/10/23 10:23
1013 [Dow Jones] Hang Seng property sub-index up 1.5% amid rebound on broader market after Monday's sell-off. Lehman Brothers stays positive on Hong Kong property sector, tips home prices will rise 15% in next 2.5 months, spurred by strong housing demand on "good affordability, falling interest rates and Hong Kong's cash pile about to get bigger as year-end bonuses approach." Adds, top picks remain "big landbank developers" with large market share in new home market, namely, Sino Land (0083.HK), Sun Hung Kai Properties (0016.HK), Cheung Kong(0001.HK) and Wharf (0004.HK).
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Old October 29th, 2007, 12:13 PM   #8
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MARKET TALK: SHK Properties Up; HK's Residential Mkt Proxy

0707 GMT [Dow Jones] Sun Hung Kai Properties (0016.HK) +4.9% at HK$1631.30, off record intraday high of HK$168 though, boosted by strong run in broader market; with HK$1.71 billion worth of shares changing hands. CLSA says in report while SHK Properties not cheap, "the deep-rooted perception that SHKP is the HK residential proxy has little changed." Rates Buy, didn't give target price. Property analysts are upbeat about prospect for HK's residential property market, with some tipping home prices will rise up to 40% in 2008 on interest rate cut, rise in disposable income. (JNL)
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Old October 29th, 2007, 02:55 PM   #9
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40%? Jesus ****...
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Old November 5th, 2007, 05:20 AM   #10
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Quote:
Originally Posted by _00_deathscar View Post
40%? Jesus ****...
Yes. I think there is a message there...
Buy property
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Old November 5th, 2007, 05:34 AM   #11
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HONGKONG RESIDENTIAL PRICES TO RISE 50% BY END-2009 - MERRILL LYNCH
Nov 2005
HONG KONG (Thomson Financial) - Merrill Lynch is expected prices in Hong Kong to rise by 50 percent by end-2009, driven by a housing shortfall and rising demand for apartments.
"We have turned maximum bullish on Hong Kong residential and expect residential prices to rise 50 percent by end-2009," said Merrill Lynch analyst Keith Yeung.
Merrill is forecasting that about 10,000-11,000 units will be completed yearly from this year to 2010, compared with an annual demand of 19,500 units.
More buyers from the mainland, strong local economy, high job security, rising housing income and a buoyant staock market are keeping demand for local housing strong, Yeung said.
"Genuine demand will likely remain resilient in the coming 15 years despite the slow population growth. The low primary transactions in the past two years mean strong pent-up demand has been accumalated in the residential market," he said.
Hong Kong developers are also unlikely to sell at low prices as land prices have risen over the years, Yeung said. Housing inventory has dropped to a record low of 6,470 units, he said.
Residential prices have gone up 10 percent from the start of the year, while transaction volume surged to 90,709 units, exceeding 2006 full year volume.
"By end-2009, we expect residential prices will still be 11 percent below the peak in 1998 and housing affordability will remain below the historical average," Yeung said.
....


1150 [Dow Jones] Midland (1200.HK) down 1.9% at HK$9.10 vs HSI off 2.6%, supported by news October property transactions +75% on year at 13,227, by value more than doubled to HK$50.7 billion. Robust data confirms market view HK property market uptrend well underway, very positive to Midland, whose earnings highly geared to property market transaction volume, prices. Stock currently trades at 19X, 14X forward earnings based on Thomson, latest Land Registry data may suggest positive bias to these consensus numbers. Further, Midland's historic peak PER is about 14X, if consensus earnings revised up, would suggest still upside in shares in longer term despite stock +130X in past year. Volume modest at HK$24.5 million; psychological HK$10 short-term resistance. Property sub-index down 1.4%, also outperforms.(RLI) Contact us in Hong Kong. 852 2802 7002; [email protected]

MARKET TALK: Midland May Rise 2-3%; Robust Oct Ppty Deals
0047 GMT [Dow Jones] Midland (1200.HK) may rise 2-3% on news October property transaction +75% on year at 13,227 according to Land Registry data; by value it more than doubled on year to HK$50.7 billion, suggesting residential price rise in tandem with transaction volume, which very positive to Midland, whose earnings highly geared to property market transaction volume, prices. Data is also positive to property stocks, as shows good purchasing power. Midland down 4.3% at HK$9.28 Friday; property stocks in sizable correction recently after SHK Properties' (0016.HK) mega placement; SHKP in 4-day 13% correction, last close HK$139 vs record HK$168 hit Oct. 29.

MARKET TALK:ML Ups Sino Land To Neutral,Fair Value At HK$24.87
0302 GMT [Dow Jones] STOCK CALL: Merrill Lynch raises Sino Land's (0083.HK) rating to Neutral from Sell, fair value at HK$24.87, on assumption of 50% rise in residential price by end-2009. Says Sino Land is biggest beneficiary of rising residential prices in HK with its large 6.93 million square feet residential land bank. But says, doesn't justify a Buy rating as it's trading at 3% discount to forecast 2009 NAV of HK$24.87/share. Shares down 2.1% at HK$23.70. (AOR)

MARKET TALK: ML Ups Cheung Kong Target To HK$182; Keeps Buy
0322 GMT [Dow Jones] STOCK CALL: Merrill Lynch ups Cheung Kong's (0001.HK) target to HK$182 from HK$115 after raising earnings estimates by 3.6% to HK$12.9 billion in FY08, 34.9% to HK$31.4 billion in FY09, based on new residential price assumption of +50% by end 2009. "With 17.3 million sf residential land bank, Cheung Kong is the largest residential developer in Hong Kong. On the back of new residential price assumption, we expect NAV will grow 16% from the current HK$157/shr to HK$182.10/shr by 2009E." Keeps stock at Buy call, which now off 1.7% at HK$138.20 vs HSI down 2.9% (YWM)

MARKET TALK: ML Keeps SHK Ppties At Buy, Eyes HK$173.63 Target
0250 GMT [Dow Jones] STOCK CALL: Merill Lynch keeps Sun Hung Kai Properties (0016.HK) at Buy, but raises target to HK$173.63 from HK$139, after raising EPS forecast for FY08, FY09 by 15%, 33%, based on assumption residential property price in Hong Kong will rise 50% by end of 2009. Adds, "with 12 million square feet residential land bank, exceptionally strong brand and premium pricing capability, SHKP is the best proxy for Hong Kong residential." Stock flat at HK$139.

MARKET TALK: ML Ups Henderson Land Target To HK$87.44 Vs HK$73
0249 GMT [Dow Jones] STOCK CALL: Merrill Lynch raises Henderson Land's (0012.HK) target to HK$87.44 from HK$73, keeps at Buy, on assumption of 50% rise in residential price assumption by end-2009. Says while Henderson Land's 5.8 million square feet residential land bank in HK small, company's 31.7 million square feet agricultural land placed it as best proxy for agricultural conversion. Also says market doesn't fully appreciate Henderson Land's large land bank of 100 million square feet in China, about to amaass a 150 million square feet China land by end-2007. Describes it as "most undervalued in the sector." Shares up 1.3% at HK$66.50.

(Guess 50% is a 'reasonable' assumption used in scenario - ie can be more, can be less, like 25% next two years or 40% in 2008 10% in 09)
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Old November 5th, 2007, 07:26 AM   #12
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Quick comment.

In HK newspaper this weekend, an analysts said - if you are a buyer, buy the property no matter what is the price - if you are a seller, think of your best price, and add 20% !!!

Now, doing the sums.... I just made another million
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Old November 5th, 2007, 11:53 AM   #13
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HONG KONG (XFN-ASIA) - Standard & Poor's Equity Research said it has downgraded its outlook on Hong Kong's property sector to 'marketweight' from 'overweight' following recent share price outperformances.

'While we remain bullish on the residential property sector, much of our positive outlook is already reflected in the share prices,' S&P Equity Research associate director Tam Ching Wah said.

'Notwithstanding the lowering of our sector recommendation, we see positive signs of a return in confidence in the residential property market,' he said.

'The recent record transacted prices for high-end apartments, the high number of residential property transactions and the much-higher-than-expected bids in (government) land auctions indicate that both property developers and buyers' confidence in the residential property market has finally returned,' he said.

He said the main triggers for the current buoyant sentiment in the residential property sector were several external factors, including expectations of capital inflow from mainland China into the Hong Kong stock market in the medium term.

He also cited a spillover of the 'feel good' factor from a rising stock market on the mainland, appreciation of the yuan against the Hong Kong dollar and the US Federal Reserve's recent two rate cuts.

'More importantly, despite the recent record transacted prices for high-end apartments, the average prices of both large and small residential units as at end-August 2007 are still 23 pct and 47 pct below their peaks in 1997, respectively,' the analyst said.

S&P Research said it expects a 20-25 pct rise in prices of residential properties over the next 12 months. It has revised the 12-month target prices of some property companies under its coverage after raising asset value estimates by 5-12 pct.
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Old November 5th, 2007, 12:12 PM   #14
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This market seems to be one of the clearest analyst-led property price rise (predictions) ever. I've never seen so many analyst predicting an BIG upturn before prices have really moved (its easier to predict big numbers if prices are up 15-20% already).
Seems like consensus is for 25-30% rise next year, with practically every report saying this (tho interesting to note - NONE of the foreign property agents predicted this earlier this year (Colliers, JLL, Savills) - most predicted luxury to rise, but not these levels suggested).
It'll be interesting to see if 'equity' analyst are proven right. All these predictions seem based on 'negative real interest rates' following the cut in US rates. I have vested interest in this as I'm fully vested in property - in this case, the analyst may well be right as this may be one of the easiest property predictions ever (barring sudden negative news) - only in HK can you can have a big cut in interest rates while the economy is doing so well due to the HKD peg. Other economies would be hiking rates up so harder to predict property prices. I think it seems the only thing unknown is size of the rise (10-15% being very disappointing).

Mega-Positive analyst: ML, S&P, Lehman, Bear Sterns, UBS
Mega-Positive property agent: All local agents (Midland, Ricacorp etc).
Welcome people who post other outlooks (including any negative ones???)
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Old November 7th, 2007, 09:07 AM   #15
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Banks bullish on HK property prices
Victor Cheung

Wednesday, November 07, 2007

Investment banks are bullish on Hong Kong's real estate market, predicting sharp price rises as early as next year.
Goldman Sachs forecast residential prices to rise up to 30 percent each year in 2008 and 2009, while Merrill Lynch expects them to increase 50 percent by the end of 2009.

Shares of local developers surged after the reports were released.

Capital values of luxury residential units will rise 25 percent to 30 percent annually for 2008 and 2009, according to Goldman Sachs, while the mass market has a growth rate of 20 percent annually over the same period. The estimate is backed by strong economic growth and higher wages as a result of low unemployment.

Larger-sized flats have climbed 18 percent on average so far this year while mid-sized apartments have risen 8 percent.

Goldman said larger housing units will outperform smaller ones, continuing a trend since the revival of the private residential market in late 2003. The investment bank raised the target prices of local developers to reflect the better outlook. It lifted its target for Sun Hung Kai Properties (0016) to HK$175 from HK$138, while it raised Kerry Properties (0683) to HK$80.80 from HK$61.80.

SHKP and Kerry are Goldman's top picks because they have higher exposure to luxury or high-end residential properties. Merrill Lynch's preferred stock is Henderson Land Development (0012), whose price forecast it raised to HK$87 from HK$73.

SHKP, which had dropped 17 percent since it sold HK$10.9 billion worth of shares on October 29, jumped 6.62 percent yesterday to HK$141.60. Kerry edged up 1.02 percent to close at HK$64.65. Henderson gained 3.82 percent to HK$65.20.

Merrill Lynch says it is "maximum bullish" on the property market as it sees strong pent-up demand after several years of low primary transactions. It said the government's policy on environmental protection and heritage conservation will result in low land supply and a "structural housing shortage."
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Old November 7th, 2007, 09:13 AM   #16
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Quote:
Originally Posted by MacauVillager28 View Post
Mega-Positive analyst: Goldman, ML, S&P, Lehman, Bear Sterns, UBS
Mega-Positive property agent: All local agents (Midland, Ricacorp etc).
Welcome people who post other outlooks (including any negative ones???)
Now Goldman has also added its name to the list... JPM also has been uprating most of the property counters but haven't seen their price forecast for property itself.

How good are equity analyst when it comes to property ???? 20-30% forecast is about as bullish property market normally can go.

Do we really have the perfect storm brewing ?? (dropping supply, wage & GDP growth, falling unemployment, falling interest rates, hi inflation, hi demand ?) The opposite of the perfect storm when prices fell 1997-2003.
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Old November 8th, 2007, 06:48 AM   #17
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The Standard, 8 Nov, Market Pulse By Dr Check

Bulls Run Wild on Property
Property counters were the major gainers as the Hang Seng Index rebounded by more than 700 points in the past two days.
Dr Check believes property shares will continue to shine in the next six months.
Centaline's Property Agency Index, which tracks secondary property prices in Hong Kong, climbed from 53 in January this year to 59.36 last Friday - a gain of 12 percent.
The index plunged from a peak of over 100 in October 1997 to as low as 33 in 2003 during the SARS crisis. It hovered between 53-55 in 2005, then moved sideways till early this year.
Centaline forecast the index to rise to 74 by August 2008, which means a 24.6 percent potential upside in average secondary property prices.Of course, the chart does not mean everything. We have to look at fundamental factors.
A weakening US dollar has drawn funds into currencies which fetch more interest such as the Australian and Canadian dollars and the euro.
Under the peg system, Hong Kong dollar assets have become cheaper to foreign funds.
A drop in US and UK property prices will mean more demand for Hong Kong units, where returns are better as the territory has been immune from the subprime crisis. With gold and commodities rising due to the faltering greenback, property assets in Hong Kong look more attractive. The becomes more so with negative interest rates in Hong Kong, as inflation is now standing at 2.7 percent is higher than the savings interest rate of 2.25 percent.
Other factors have also helped the property market - wage increases, particularly in the financial sector, lower unemployment and more government spending on infrastructure.
Profits from the stock market allow the middle class to move to bigger homes while richer people can switch to luxury housing.
Then there is the emergence of wealthy home buyers from China.
Suddenly, the local property market is blessed with so many positive factors. Tomorrow we'll see if it is too late to join this rally.
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Old November 16th, 2007, 10:18 AM   #18
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Hong Kong residential property prices to rise 35 percent in 2008 - CLSA

HONG KONG (Thomson Financial) - Residential property prices in Hong Kong will rise 35 percent in 2008 over current levels, driven by strong liquidity pouring into the city and solid fundamentals in the realty market, CLSA said in a research note.

CLSA has raised its growth forecast for the sector from a previous projection of a 20 percent rise after the US economy showed signs of further weakening.

""Liquidity is seeking safe havens away from the weak US economy. Hong Kong property looks the perfect hiding place, with local currency weakness (given the Hong Kong dollar's peg to the weakening US dollar) driving up inflation, and rate cuts driving cash into real assets,"" CLSA analyst Nicole Wong said in the note.

The Hong Kong economy has shown a strong performance so far this year, with unemployment at a nine-year low and household income growing steadily.

Rate cuts in the US have ensured lower base rates in the city and banks have cut mortgage rates three times since September.

The real mortgage rates have been falling even faster due to accelerating inflation, now at a nine-year high, creating an environment conducive to higher residential property demand.

A 35 percent increase in home prices will put 2008 ahead of 1993's 33 percent rally but below 1991's 61 percent, the note said.

The price increase in 2008 will also overtake the 31.5 percent posted in 2004 when property prices were recovering off an extremely low base with help from historic low mortgage rates.

Property prices rose 1.2 percent in 2006 and growth is expected to cross 10 percent this year.

Among realty plays, landowners like Swire Pacific, Wharf (Holdings) and Hysan Development are expected to benefit more from the property price rally than developers such as Sun Hung Kai Properties, according to CLSA.

""The landlords appear to provide much better fundamental values with their deeper discount while being equal beneficiaries to the asset inflation story of Hong Kong,"" said CLSA's Wong.

The property index, which represents the top five developers in Hong Kong, has risen 32.5 percent since end-August on hopes of rate cuts in the US, while Swire Pacific has gained only 17.4 percent.
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Old November 16th, 2007, 08:41 PM   #19
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Ah .. the start of the asset bubble ...
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Old November 17th, 2007, 05:28 PM   #20
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Another asset bubble
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