Strong demand from investors and occupiers is continuing to push up property prices in Hong Kong, the most expensive housing market in the world.
Resale home prices in Hong Kong have reached new record highs despite the government’s efforts to control the red-hot property market by imposing taxes, including those recently introduced last November, reported Bloomberg.
According to the Centaline Property Centa-City Leading Index, prices of resale units peaked in the week ended 19 February, exceeding the previous record in September 2015.
Notably, prices have rebounded by 16 percent since it hit rock-bottom last March, in spite of the fact that resale deals have declined sharply after the authorities raised the stamp duties for all home buyers in November, except for first-timers.
In addition, the government’s cooling measures have unintendedly spurred demand for new residential properties as fewer resale homes are available in the market. Home builders, who are attracting buyers with loan offers and tax rebates, are also reporting good sales.
“The market is hot right now” due to strong demand from investors and occupiers, said Wong Leung-Sing, Centaline Property Agency’s Associate Director for Research.
Meanwhile, KWG Property Holding and Logan Property Holdings jointly defeated 13 other bidders in a government tender for a rare land parcel in Ap Lei Chau island. The area is connected to Hong Kong island by a bridge and has been accessible by subway since last December.
The two Chinese firms acquired the waterfront residential land for a record price of HK$16.9 billion (S$3.06 billion), which translates to around HK$22,000 psf (S$3,982 psf), surpassing the cost of the existing homes in the area.
“This is a very bullish signal… People look at that and say that in the next couple of years pricing is going to be a lot higher,” said Denis Ma, JLL’s Research Head for Hong Kong.
Meanwhile, mainland buyers are making a beeline for Hong Kong properties as rising prices in China and the government’s cooling measures make the city more attractive for home purchases.
The Special Administrative Region (SAR) is also considered the most expensive housing market in the world, with prices surging by 370 percent since 2003.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
