Standard & Poor's Asian Equity Research remains optimistic about Hong Kong property stocks despite a recent run-up in the counters that has left them looking expensive.
'These stocks are now priced ahead of their fundamentals,' associate director Christopher Lee said yesterday.
'But there is significant potential for an upward revision,' he said, pointing to increased transactions and fewer bankruptcies as among the data which could justify a revaluation of the sector in the middle of the year.
He said the property market could get a boost from the weakening US dollar. A weaker greenback makes Hong Kong property and other assets less expensive for overseas investors.
Mr Lee remains positive in the luxury property sector and is becoming more optimistic in the mass residential market - despite the oversupply overhang - amid an improving sentiment among home buyers and investors.
Sun Hung Kai Properties, Hang Lung Properties and Singapore-listed Hongkong Land were his top picks in the property sector.