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Regulation

Clarity needed on Hong Kong cooling measures, says Knight Frank chairman

PUBLISHED : Wednesday, 18 March, 2015, 6:00am
UPDATED : Friday, 17 April, 2015, 3:58pm

There was a need for more clarity about Hong Kong's real estate cooling measures, Knight Frank chairman Alistair Elliott said.

His comments follow the government's announcement at the end of February of the seventh batch of measures in just over two years designed to cool the property market.

"Are the ones that are here, here to stay? Are they likely to get more aggressive? Might they come off a bit? I think our feeling is they will come off a bit," Elliott said.

In his opinion, Hong Kong's real estate market is going to be quite constrained in the coming months. "I think it's going to be a quiet year. I'm not sure we are going to see much volume. And until there's some certainty about the direction of the cooling measures, I think the residential market will be subdued," he said.

Elliott noted that global investors were generally very cautious and discerning. "They will only buy something if they really understand it, if there's transparency in the market, if there's clarity … if they have confidence in the long-term nature of that particular environment."

He noted that Hong Kong had a long and reputable commercial history in its favour.

"It is a hub of the world. There is a massive community growing around Hong Kong, there is the prospect of [the number of] occupiers growing in China and that's building into Hong Kong as we've seen," Elliott said. "So I would suspect - although I am cautious [regarding] the next 12 months - because there is this pool of money moving around the world to invest in real estate, if there's a value story in Hong Kong, then it will come back very strongly."

When asked about whether the Occupy Central protest movement and the chief executive election in 2017 would dissuade investors from buying in Hong Kong, Elliott said that, as had happened in other regions of the world when there was a period of significant uncertainty, the investment appetite might go somewhere else.

"Let's be clear: I don't think Occupy helped and I don't think any uncertainty that an election introduces helps, so it might be this year and next year remain relatively subdued," he said.

Even considering future political tensions, Knight Frank's chairman is optimistic about the local market's long-term prospects. "I don't think it means Hong Kong is not on the investment map. I just think that there might be other areas more attractive in the short term," he said. "Medium to long term? Buy, absolutely. Would I be rushing at the moment? No. I think I would wait and see."

Despite the cautious prospects for the months ahead, Elliott named Hong Kong and Singapore as two of the top cities to keep an eye on this year.

Aside from that, some cities in Myanmar, Vietnam, Australia and India "would be worth a very close look", Elliott said.

In C-Suite, Elliott unveils how his firm is revising its China strategy