Investors think it's time to take profit

The investment tide in Hong Kong's property market is turning as more buyers cash in their gains because of fears that tighter credit conditions and diminishing buying desire will check the rise in prices this year.

'A few months ago no deal would be done if offers failed to match an asking price. But investors are more negotiable nowadays because they would like to take profit,' said Thomas Lee Pui-cheung, a regional sales director for Centaline Property Agency in Kowloon Station and Tsim Sha Tsui.

The change in sentiment was dramatically underlined last month, said agents, when a single investor who had a portfolio of more than 50 rental apartments in Mei Foo Sun Chuen ended up selling more than 30 of the units at a discount to his original asking prices since last month, prompting other investors to lower their target prices as well.

Average selling prices in the area were now down 5 per cent at HK$4,150 per square foot from their August peak of HK$4,357 per square foot, said Johnson Yu Pak, a senior manager for Midland Realty's Mei Foo branch.

A similar discounting trend was beginning to emerge in other localities where strong price rises had been recorded so far this year, Lee said.

At the Arch in Kowloon Station, prices had jumped about 25 per cent to HK$20,000 per square foot since the start of the year, said Lee, and owners were now willing to consider lowering their price targets in order to secure a deal.