Mass residential and luxury property transactions in Hong Kong are seeing an upward trend, following recovery from a dip in November 2010, said Knight Frank in its January 2011 monthly real estate report.
“The quick revival was attributed to the fading impact of the new measures, on the back of sustained favourable environmental factors, including low interest rates, limited housing supply and continual capital inflow,” it said.
Transactions declined following the introduction of government regulatory policies, including the lowered maximum loan-to-value (LTV) ratios and the imposition of a special stamp duty, which affected market sentiment, resulting in low transaction numbers, said Knight Frank.
The luxury market was underpinned by sustained demand from long-term investors and cash-rich homebuyers that registered several record-breaking deals in December.
In the mass residential sector, the market saw home buyers returning with concerns that prices will rise after the Lunar New Year. Units withdrawn by prospective buyers have been resold at higher prices.
“In 2010, overall luxury residential prices surged 14.5 percent with Mid-Levels (district) experiencing the most noticeable price increment of 20.4 percent and Island South coming second with an 18.6 percent gain,” said Knight Frank. ”Meanwhile, mass residential prices increased about 20 percent over 2010.”
It added that the leasing market has stagnated over the previous month because of the traditional slow season.
“An increased number of flats available for lease under the new regulatory policies dragged down rents in some luxury residential developments but overall, luxury residential rents continue their uptrend, rising 0.8 percent month on month,” while mass residential rents declined two percent in December, it said.