The chase for technology stocks in recent months has taken the lustre off 'old economy' plays including Hong Kong's stalwart property plays. However, the Internet craze may have been behind an upswing in the luxury residential market.
According to analysts, this property segment was the best performer in the first quarter of this year, and is expected to continue to set the pace this quarter.
Some people in the marketplace suggested the wealth-effect of the recent technology boom was responsible, although the luxury sector traditionally leads a market recovery.
Daiwa Securities property analyst Jonas Kan said first-quarter transactions for flats priced more than HK$10 million were up 16.9 per cent quarter-on-quarter and 16.4 per cent higher year-on-year.
Prices at the most popular luxury estates rose 6.9 per cent in the first two months of the year 'which reflects the big profits made in the tech-stock boom', he said.
Daiwa's favourite stock pick to benefit from the sector upswing is Kerry Properties, which has the greatest exposure to the luxury segment.
