Good Buy? Good Bye?
With the property market still uncertain, is now a good time to purchase?
Everybody knows the Hong Kong property market is an untamed animal. And the recession’s only made it more unruly. Laid off bankers are moving out of their luxury pads in droves, while foreign dictators are buying mansions in the New Territories. But overall prices haven’t plummeted quite as hard as expected, and some already see inklings of a silver lining on the horizon. We ask the experts about the damage done so far, when the new time to buy might be, and what areas to look out for.
Where we are now
There’s no doubt that the recent economic turmoil has taken its toll on property figures. According to Simon Wong, regional economist at Standard Chartered Bank, home prices in Hong Kong have fallen 20 to 30 per cent since the Lehman Brothers collapse last September.
Yet Wong adds in the same breath that the drop has been relatively contained. “While a recession is almost by definition a negative for properties, so far it’s not nearly as bad as ten years ago during the Asian economic crisis, when prices fell a lot sharper and faster,” he says.
Most notable is the rebound this first quarter. At the end of last month, Centaline Property Agency reported a rise in local home prices of 5.5 percent since the end of 2008. The rise was attributed to buyers attracted by lower mortgage rates and the fall in prices.
Particularly striking within that rise was the jump in activity at a number of traditional mass-market housing estates. According to Victor Lai, Managing Director for Centaline Surveyors, Kingswood Villas in Tin Shui Wai saw its number of transactions rise from a mere 20 to 30 units in November to more than 100 last month. Meanwhile, according to the Centaline report, average home prices at Taikoo Shing rose 9.9 per cent between December 28 and March 22.
Time to buy?
So should first-time buyers be diving in there with what’s left of their savings to cash in on a big comeback? Naturally, nobody’s ready to say for sure what conclusions to draw from this small resurgence. But all agree that recklessness got us into the mess we’re currently in, and it’ll be unlikely to get us out.