WITH signs of improving Sino-British relations and continual efforts towards a relaxation of the Government's 70 per cent mortgage ceiling, Hongkong property analysts agree that the property market is set for a surge of activity. So where are tomorrow's hot spots? And which areas have exhausted their potential? At present, there are some principal factors which will influence Hongkong's property market during the next three to four years. For instance, property analysts agree that Mr Li Ka-shing's proposed $15-billion light railway, linking rapidly-developing Ma On Shan and Cheung Sha Wan in Central Kowloon, will boost property prices by up to 10 per cent in surrounding districts of the New Territories. ''Even with all the present transportation problems out there, there is still a great demand for property in the Ma On Shan, Sha Tin and Tai Wai districts. With a railway system we could easily see a five to 10 per cent appreciation in property prices,''said Ms Julie Baldwin, Colliers Jardine's valuation and consultancy director. Ms Baldwin emphasised the importance of convenient transportation by referring to the example of Tate's Cairn Tunnel. ''Constructed a couple of years ago, Tate's Cairn Tunnel provided relief for congested traffic conditions from Sha Tin to Kowloon - and developments at Sha Tin definitely saw substantial increases in property prices. But this system, although mitigating some congestion, still forced many residents to use buses, which are much less convenient, uncomfortable and far slower than a light-rail system would be,'' said Ms Baldwin. Affirming Colliers Jardine's theory, Mr Frank Marriot, business development manager for First Pacific Davies said: ''A light railway system would have a tremendous effect on property prices out there. I suspect the value of the market is really going to take off.'' Mr Marriot, agreeing with the potential 10 per cent property value increase on top of normal market appreciation, said that the railway would make an incredible difference and would be a deciding factor in property purchases. Most property analysts agreed that among the surrounding districts, Ma On Shan's property market will see the greatest appreciation. ''The Ma On Shan district suffers the greatest burden and thus will see the most promising effects of a railway system. At present, the Ma On Shan residents must be bused to the nearest KCR [Kowloon Canton Railway] station at Sha Tin. But the buses - in addition to the KCR - are tremendously congested. Even the KCR's first class compartment is over-crowded,'' said Ms Baldwin. Second in line to benefit from Cheung Kong's railway would be Tai Wai. ''Tai Wai is almost as bad off as Ma On Shan, regarding transportation problems. This is because by the time the KCR gets all the way down to the Tai Wai station, there is often no room left in the train. At least those getting on at Sha Tin have a good chance to get on the train,'' Ms Baldwin said. Another important aspect which promises this area a bright future is superior quality. According to Best View Real Estate's managing director, property developers building in the New Territories have placed incredible importance on quality in an effort to compensate for inaccessible locations. Mr David Faulkner, a partner at Brooke Hillier Parker, agreed: ''It's true that developers tend to compensate for the transportation inconvenience by providing residents with first-class living facilities.'' He added that an end to the transportation problem - the only real inherent disadvantage for investors in the New Territories - would make the area much more attractive for buyers. But the New Territories is not the only hot-spot for future investments. With the Hongkong Government pushing ahead with plans for the Lantau Fixed Crossing, property analysts are now encouraging investment on Lantau's pristine island which has - until now - been considered as ''too far out of the way''. ''Because Lantau is not considered a central district, property has appreciated much slower, with a lower return. But the airport project, initiating a number of proposed projects which would facilitate transportation to Lantau from central districts, could greatly change the property market out there,'' said Mr Marriot. A recent Richard Ellis report - studying the ramifications of the Fixed Lantau Crossing, the Western Harbour Crossing and the third cross-harbour tunnel - concluded that land values would rise with the increased demand for decentralised office and residential space respectively. Similar conclusions - said to be derived from the experience of some Lantau-based estate agents - have confirmed that land prices in some parts of the island increased by almost 50 per cent in the past 12 months. However, property investors might still be curious as to which areas should be avoided. ''That's not as easy,'' said Mr Marriot. ''There's nothing really dead or washed-up on the property market. Hongkong's market is so different than any other market - it is so liquid and there is just no recession. ''Albeit there are areas less expensive than others, but Hongkong's overall market activity is booming.''
