SHKP sees property correction as short term
The vice-chairman of one of Hong Kong's largest and most aggressive property developers, Sun Hung Kai Properties' (SHKP) Thomas Kwok Ping-kwong, says the correction in residential property prices will be short-lived.
Estate agents have reported both home prices and buying activity in urban districts down by more than 10 per cent since the Government introduced new anti-speculation measures in late March.
Mr Kwok said the correction would end this summer if the performance of the US economy and rises in interest rates were as expected.
'However, I have no idea whether home prices will go up or not,' he said. 'It is likely the Hong Kong Government and the Special Administrative Region Government will regulate home prices through the release of substantial land supply.
'Local housing prices will not increase as much as in 1996 or the first quarter of this year.' In light of growing speculation in the housing sector, the Hong Kong Government said that in the next few years it would allocate sufficient land to meet growing demand for housing.
Mr Kwok said the correction was good for the market in the long term as non-stop increases in home values would eventually harm the sector. Mr Kwok said Sun Hung Kai had escaped the worst of the correction.
Meanwhile, land premiums paid for the developments this year would be more than $10 billion, similar to last year, he said.
The $10 billion payable to the government would include the $5.8 billion land premium for the Hong Kong airport station property development in Central in which SHKP has a 47.5 per cent stake.
Other projects are expected to include the residential development on Ma Wan Island near Tsing Yi Island and the housing project at To Fung Shan in Sha Tin.
Mr Kwok said the group's two large residential projects - Villa Esplanada on Tsing Yi Island and Parkside Villa in Yuen Long - were expected to be launched next month.
SHKP said it would provide second mortgage loans for potential buyers of its Royal Sea Crest residential development in Sham Tseng.
The company has registered 234 prospective buyers for the first batch of 48 Sea Crest units.
STEADYING INFLUENCE Property correction to be short-lived US holds key to direction of sector Substantial future land supply seen