Mass-market homes hit new price, rental highs
Prices and rents for mass residential property hit record highs last month as the new government failed to take action to cool the market.
'The market believes the new government [led by Chief Executive Leung Chun-ying] cannot cool the property market because its authority has been undermined,' David Ng Ka-chun, head of China and Hong Kong property research at Macquarie Capital Securities, said.
According to Centaline Property Agency's Centa-City Leading Mass Index, which charts average sale prices at 85 large housing estates, flat prices on the secondary market climbed to 103.71 points on July 29 from 101.99 points a week earlier. That surpassed the previous record of 103.18 points on October 19, 1997.
Average rents at the 85 estates were HK$20.7 per square foot last month, according to deals handled by Centaline. That was above the previous record of HK$20.6 per sq ft recorded in September last year.
Residential rents rose 9.5 per cent from HK$18.9 per sq ft in February, while property prices increased by 10.5 per cent in the first half.
'Property prices continue to rise as homebuyers believe the new government will not introduce strong measures to the market,' Centaline associate research director Wong Leung-sing said.
'Also, the US central bank will stimulate economic growth with a third round of quantitative easing and drive people buying homes to hedge against inflation.'
Wong forecast property prices would rise a further of 5 per cent in the first half.
But, Macquarie's David Ng expected property prices to drop 5 to 10 per cent in the second half of this year and the first half of next year.
'The selling prices of new projects launched in recent months have softened and are close to the prices of second-hand homes. Property sales remain weak,' he said.
Ng said the government should come up with cooling measures as soon as possible.
In the primary market, Sun Hung Kai Properties deputy managing director Victor Lui-ting said that most of the 650 flats at Imperial Cullinan at Kowloon Station had sold. That helped the company generate HK$15 billion.
The firm planned to launch the second phase of The Wings in Tseung Kwan O in the fourth quarter.