Chinese funds to move into Hong Kong’s mass housing, push prices to new highs, analysts say
Friday’s sale by tender at Ap Lei Chau was a record for the southern district, exceeding market valuation by 50 per cent. The reaction in the market was swift and apparent, with owners and developers raising prices immediately
Chinese funds, which flooded Hong Kong’s high-end residential property market and contributed to making the city the world’s least affordable urban centre last year, are likely to trickle down into mass-housing in 2017, real estate analysts and agents said.
With additional buyers and funds chasing a limited supply of apartments, prices may increase by more than 10 per cent in the broader mass-housing section of the market, said Cushman & Wakefield’s greater China vice-president Alva To Yu-hung, revising his agency’s earlier forecast of a 2017 increase of between 5 per cent and 10 per cent.
What sparked the change for To’s forecast was Friday’s sale by tender of a residential land plot in Ap Lei Chau in the island’s southern district for a record HK$16.86 billion.
The higher-than-expected sale price was “worrying” enough for Financial Secretary Paul Chan Mo-bo to go on a radio talk show on Saturday morning to reassure listeners that the government would increase land supply in the new year and control investments to ensure a “stable property market”.
In the city’s residential property market, the reaction after Ap Lei Chau was swift and apparent, agents said.