HK residential property market recovering
( 2004-01-31 16:43) (Xinhua)
It is said that Spring Festival is not a good business time for residential property market, but it is not the case in Hong Kong this year.
Hong Kong has been seeing a significant good performance in its residential property market in terms of both activity and price levels in the Spring Festival. Generally speaking, Hong Kong residential property market had sailed through the toughest periodand is on its road to sustainable recovery.
During the past six years, Hong Kong residential property market had experienced a long time recession since July, 1997. The residential property owner had lost nearly 70 percent of its property value at August last year compared with 1997.
Thanks to the Closer Economic Partnership Arrangement (CEPA) and the "Individual Travel" Scheme, the residential property market finally went on the road of recovery since August 2003. Nowit has recovered some of its lose, the pricing level is back to second half of 2002.
Oversupply, price war, high unemployment and economic uncertainty are the four areas that have adverse impacts on the residential market. But those negative factors were eased.
Hong Kong residential property market should steadily recover, said Chief Executive of Hong Kong Special Administrative Region (HKSAR), Tung Chee Wha. The HKSAR government enact some policies tohelp easing the oversupply problem.
According to the latest "BOC Economic Review Monthly", the analyst of Bank of China (Hong Kong) forested that the newly finished houses will be around 10 thousand in 2007, the lowest level since 1976. Also the oversupply problem will be released before 2007.
With CEPA and "Individual Travel" Scheme, Hong Kong economy rebounds. It is forested that the GDP will grow 5 percent year on year for Hong Kong this year, the unemployment rate will be drop step by step, the deflation will end in the first half of this year. More importantly, Hong Kong residents are more optimistic tothe future, which is showed by many different survey.
A survey conducted by a local property agent showed that 88.9 percent of respondents thought the property price will increase this year.
Real estate developers are more aggressive on price setting now.One developer even raised its price twice within one week during the Spring Festival. As the property market seems to boom again, some analysts had warned that if the residential property price soars in the short term, it may not be good to the economy.
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