bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

authorLocations

authors

paywallTypes

corrections

sponsorType

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

SCMP Reporter

PRICES at the top end of Hong Kong's residential market rose by 14 per cent in the last quarter - surprising even the most optimistic forecasts, according to a new report.

  Values rose by as much as 15 to 20 per cent in some areas during the last three months, says a Brooke Hillier Parker (BHP) report.

  And the firm predicted that prices would continue to rise by five to 10 per cent in the next six months.

  But leading analysts Soloman Brothers disputed the figure, saying it was an over-estimate.

  BHP's September Hong Kong Residential Market Review, released yesterday, shows that luxury sector prices have continued to increase despite the tighter mortgage lending restrictions imposed by the Hongkong Bank and the Hang Seng Bank in August.

  The figures, showing an average growth of 14 per cent on selected apartments, surprised analysts, most of whom had expected a more moderate rise.

  BHP said the rise was because of a very active pre-completion market and developers offering finance packages.

  Soloman Brothers' senior research analyst, Franklin Lam, said a growth rate of 14 per cent was slightly over estimated as sales activity during the quarter was low due to a pull out of mainland Chinese investors.

  Mr Lam said the figure would have been closer to eight per cent for the quarter which would take the overall luxury residential growth rate to 25 per cent for the year to September.

  ''I think the effect of the mortgage lending restrictions on the market would have been mild and would have effected the volume of sales rather than values,'' he said.

  ''Prices of Hong Kong's residential market are strong because of the strength of growth in personal income.''    AG Wilkinson and Associates' assistant director, Michael McGuire, said he did not expect prices would rise any further before the end of the year.

  ''There is no reason that prices will fall as there is no need for vendors to sell. But to say prices will rise is to imply that there is some incentive for people to buy,'' he said.

  Mr McGuire said mortgage restrictions would not be lifted in the medium term, which would keep most buyers out of the market.

 ''The turnover is so depressed at the moment that only special end users, who do not need dramatic funding from the banks, are in the market.''   The volume of residential sales transactions across the board has slowed down considerably since the new mortgage lending restrictions were imposed.

  ''We need to be able to see more sales evidence before we can predict whether prices will rise beyond the inflation rate in the next few months,'' said Mr McGuire.

  BHP's figures compare with a price growth of 6.7 per cent in the previous three months to June 30.

  The report warns the tighter lending policies of major financial institutions may effect values in the short term and the mass residential market will slow down and possibly show negative growth as lending restrictions take effect.

  ''It is predicted that sale prices in the short term will consolidate and possibly, in some areas, reduce.

  ''The tighter lending measures taken should not affect first home buyers. However, it will impact on the speculator and investor in the $5 million to $12 million range,'' the report says.

  Return on investments remained steady at about 6.5 per cent and rents have risen in unison during the third quarter.

  The report says the leasing market, which tends to follow the sales market, was now, surprisingly, keeping pace with the rise in values.



Luxury flats rise by 14 pc