Hong Kong residential property prices will likely fall up to 10 percent in the coming months, said a senior executive from property developer Wheelock and Co Ltd, days after the government’s announcement of its toughest market-cooling measures this year.
Housing prices in the city have climbed by about 50 percent since the start of 2009, with luxury apartments exceeding earlier price peaks reached in 1997 due to low mortgage rates and strong buying by mainland Chinese.
In order to control a property bubble, the Hong Kong government tightened mortgage restrictions and the raised stamp duty on short term transactions. “It’s inevitable that housing prices will face some adjustments as government measures will have an immediate impact on speculators,” said Ricky Wong, managing director of Wheelock, in an interview with Reuters.
“There’s a chance housing prices will drop by up to 10 percent,” said Mr. Wong. However, the company was not very concerned that its business would be affected by the measures since it had no new project launches over the next three to six months, he said.
“The government has to do what it has to do,” said Mr. Wong. “There are extreme measures at extreme times.” He said the company planned to sell its non-core assets and focus on developing its Hong Kong business, with property sales for 2011 likely to be higher than the HK$2 billion forecast for 2010.
This move would allow its unit Wharf (Holdings) Ltd to focus on property development in China.
Hong Kong-listed Wheelock owns a majority stake in Wheelock Properties, which is a shareholder of Wharf (Holdings) and owns a shopping mall on Singapore’s Orchard Road.