Hong Kong flat prices could plunge 40pc, developer warns
Emperor International executive director Donald Cheung Ping-keung says Hong Kong property prices may drop a further 15 per cent, after declining 10 per cent since the end of April.
"Property prices surged sharply between 2010 and 2012. It is still reasonable for property prices to drop 30 to 40 per cent," Cheung said yesterday after the firm's annual general meeting.
He said the price of general housing has fallen 10 per cent since the Residential Properties (First-hand Sales) Ordinance took effect on April 29.
"Property prices may drop a further of 10 to 15 per cent. The fall in land price would be more than the housing price," he added.
But Cheung is more optimistic about the market outlook for Hong Kong Island.
"Most of our residential projects are on Hong Kong Island, which has less new housing supply. The fall in housing prices would be less than the other districts," he said.
The developer has about 30 unsold flats left at new projects. It plans to launch the remaining flats at its residential project, 18 Upper East in Shau Kei Wan, next month.
Another new project, 180 Connaught Road West in Sai Wan, will be released for sale in the middle of next year.
On land acquisition, Cheung prefers sites in urban areas.
"For sites in the New Territories, we are only interested in luxury residential sites," he said.
In a report released on Tuesday, analysts at Malaysian-owned bank CIMB said limited first-time buyer demand, increasing supply and the consequences of a potential re-pricing of United States monetary policy suggested that the inherent volatility of Hong Kong property prices will reassert itself.
They forecast property prices to fall 10 to 15 per cent in 2014 and by a further 15 to 20 per cent in 2015.
Emperor International shares closed yesterday at HK$2.10, up 0.49 per cent.