Hong Kong stock rally fuels fresh spurt in city's luxury home prices
Sales of homes worth more than HK$12m at their highest since late 2012
Hong Kong's stock market surge is turning up the heat in one of the world's most expensive property markets, as mainland investors plough quick profits into million-dollar mansions in what analysts say may be a record year for home sales.
The stocks spree has sent the benchmark Hang Seng Index to seven-year highs as mainland investors snapped comparative bargains before pocketing gains. With property prices in the city already more than double their 2008 level, brokers say luxury home sales are booming, despite the city's best efforts to stop the market overheating.
Centaline Property Agency expects the trend to swell new home sales to HK$240 billion this year, easily beating last year's record of HK$178 billion. Upward price pressure may stoke discontent in a city where the cost of a home is already out of the reach of many, fuelling calls for the government to consider new measures to puncture the trend.
"Luxury home sales are benefiting a lot from the ample liquidity in Hong Kong now," said real estate agent Raymond Li, whose team last week sold three houses worth HK$190 million to two investors in the city's Mid-Level and Southern district. "Hong Kong stock market is doing really well, so we are expecting a further rise in sales."
Centaline said sales of homes worth more than HK$12 million jumped in the first quarter to their highest since late 2012. With a new supply of 3,100 luxury units from developers such as Sun Hung Kai Properties and Swire Properties due on the market this year, it expects the boom to continue.
The upturn in the high-end sector follows the Hong Kong government's latest effort to curb speculative property demand. Targeted at smaller homes priced below HK$7 million, that move would mostly affect the city's middle-class buyers.