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Hong Kong Monetary Authority (HKMA)

Many still prefer the lure of property, says survey

One in four investors polled says it is still an attractive asset and prices will continue to rise

PUBLISHED : Wednesday, 17 October, 2012, 12:00am
UPDATED : Wednesday, 17 October, 2012, 1:53am

A CPA Australia survey shows that more than 25 per cent of Hong Kong investors still prefer to put their money into property, another sign that investors are ignoring the government's efforts to cool the property market.

Seventy-one per cent of respondents said property prices would go up next year, compared with only 9.2 per cent in a similar survey last year.

"The low interest rates are driving surplus cash towards property, and money from the mainland has been fuelling property purchases at prices that have surpassed those in 1997," said CPA Australia's Bernard Poon who is divisional president, greater China.

CPA Australia's annual economic sentiment survey was conducted last month on 211 accountants and executives of listed companies in Hong Kong.

Mortgage rates are hovering around 2 per cent, the lowest in decades, making it easy for many to borrow to buy property. Hong Kong property prices, as a result, have soared 240 per cent from a 2003 trough, and have surpassed their October 1997 peak, according to Centaline Property Agency.

But even as prices continue to climb, 25 per cent of respondents said property still remains attractive and are looking to increase their investments next year. About 24 per cent said they will invest in stocks while 27.9 per cent said they prefer cash.

"With minimal land supply over the past decade and a long lead time for new property development, housing demand remains strong despite the government's attempts to cool the market by tightening mortgage requirements and raising transaction levies," Poon said.

The Hong Kong Monetary Authority last month introduced more curbs on mortgages for luxury properties or second homes. The government also announced plans to release more land, but none of the measures seem to have had any effect.

The survey respondents were optimistic about the economy next year, with only 36 per cent saying they had a negative outlook for 2013, compared with 55 per cent last year.

The survey showed lingering fears about the job market as fewer listings this year could lead to more lay-offs in financial firms.

About 72.1 per cent of respondents said Hong Kong's unemployment rate would be between 3 and 4.9 per cent next year.