Luxury prices to fall soon

PUBLISHED : Wednesday, 01 September, 1993, 12:00am
UPDATED : Wednesday, 01 September, 1993, 12:00am

PROPERTY analysts have predicted a drop in luxury prices following their climb in the first six months of this year.

Virginia Wai, a director at Colliers Jardine, said she expected a correction of about five per cent before the end of the quarter.

But the firm believed prices would rise again in the two months before next year.

Midland Realty research shows only half the number of transactions for luxury homes in August as in July.

The drop is blamed on the latest restrictions on buyers borrowing from banks and the mainland authorities' economic curbs.

In some areas, according to Midland, the volume of transactions dipped by 70 per cent.

Ms Wai said: ''We have seen a great general drop in volume since July.

''I believe it has gone down around 50 per cent on average from the peak in May and June.

''But I think most of the owners are still holding out at the same levels, so prices have consolidated.

''Most people realise the measures from China and the banks will be temporary so they are hoping prices will hold up.

''It largely depends on the situation, but I think a correction of five per cent is likely soon.

''I think they will go back up again in November and December, though.'' The Hongkong Bank introduced a series of measures last week to restrict lending and ease speculation in the residential market.

Ms Wai said rentals for luxury apartments were benefitting as sales stood still.

Midland said the rent for units in some districts rose by 30 per cent in August.