HK property prices up 45pc on post-crisis low

PUBLISHED : Wednesday, 27 October, 2010, 12:00am
UPDATED : Wednesday, 27 October, 2010, 12:00am

Property prices in Hong Kong have risen by more than 45 per cent from the trough to which they sank after the onset of the global financial crisis in 2008, research by the Hong Kong Monetary Authority shows.

The recovery in the luxury residential market has been particularly strong and average prices in the sector are now 14 per cent higher than their previous historic peak, reached in the third quarter of 1997.

Prices in the mass residential market are only 10 per cent down on the peak levels reached before the Asian financial crisis of 1997-1998 triggered a sharp slump in the market.

But homebuyers are not as heavily indebted as they previously were, with the current mortgage repayment-to-income ratio at around 40 per cent, compared with more than 100 per cent in 1997. Mortgage rates are also less than 2.5 per cent, against more than 10 per cent in 1997.

The average loan size is about HK$2.5 million with an average contractual period of 23 years, both at record highs for the past 10 years.

Hong Kong has surpassed New York, Paris and Tokyo to become one of the most expensive cities for buying a flat, according to a report from the Global Property Guide.

The report says Hong Kong is now the third most-expensive city for buying a 1,291 sq ft apartment in the city centre, with Monaco the world's most expensive and London in second place.

'Demand for housing in Hong Kong is no longer limited to local people, but also comes from the mainland,' said Alva To Yu-hung, the head of property consultant DTZ.

 

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