Luxury prices to stabilise in second half
The luxury residential market is set for further consolidation in the short term but may stabilise later this year, says Chesterton Petty.
The company said in a report that economic uncertainties might continue to hound the property and stock markets in the short term, but the negative impact was not expected to be as severe as before.
Luxury home prices could fall 5-10 per cent on short-term interest rate worries and continuing turbulence in the region, it said.
'They should, however, become more stable in the second half of the year as demand for luxury homes remains substantial,' the agency said.
Chesterton Petty said the large supply of low-density housing in the New Territories should be disregarded as these properties were not considered luxury.
New supply of luxury flats on Hong Kong Island would be stable, with a projection of 489 units for 1998 and 322 for 1999. Large luxury developments in progress included Wharf (Holdings)'s Hill Crest on the Peak, Sun Hung Kai Properties' 48-unit project at 127 Repulse Bay Road and Henderson Land Development's 106-unit project in Bowen Road.
Central Development is building a 115-unit project in Stubbs Road while Hongkong Bank subsidiary Wayfoong Property is developing 44 luxury flats in Plantation Road on the Peak. Wharf also has other developments under construction on the Peak.
Since the direction of luxury prices remained unclear, owners had preferred to lease units instead of putting them up for sale, Chesterton Petty said.
With more flats available in the leasing market, luxury rents had been dragged down by 15 to 20 per cent, depending on location and facilities, since October, it said.
However, the consultant said the luxury residential market would grow steadily in the long term in the absence of unforeseen circumstances.