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17pc plan new flat purchase despite slump

Nearly one-fifth of people are planning to buy new flats in Hong Kong during the next two years despite a slump in confidence in the property market, a survey revealed yesterday.

A further one-tenth are planning to buy flats on the mainland in the next two years, while five per cent said they were considering doing so. More than 10 per cent already own property on the mainland.

More than half of the 1,000 people polled said they were pessimistic or very pessimistic about prospects for the local property market in the next two years. The study was carried out by random phone interviews in mid-May by the Chinese University of Hong Kong.

'The proportion of prospective buyers - at 17 per cent - is not bad in view of the current sluggish property market,' said Professor Yeung Yue-man, director of the university's Institute of Asia-Pacific Studies.

Professor Yeung said interest in property investment on the mainland was not surprising as other figures showed that last year Hong Kong people bought 10,000 new flats in Shenzhen, half of the 20,000 new flats purchased locally.

'I believe they are optimistic about economic development in both Hong Kong and China in the immediate future for two major reasons - China's accession to the World Trade Organisation either this or next year and the development of the western parts of China.'

Although local private property prices were perceived as high by one-third of respondents, half said the prices were at appropriate levels.

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