Property News · August 22, 2016

Hong Kong’s luxury market will fall, but how much?


From The Peak to Island South, a gradual downward slope in luxury home prices is to be expected in Hong Kong
View from Jardine’s Lookout. Luxury home values slightly declined in the neighbourhood in July, according to Knight Frank. Image credit: Rat007 / Shutterstock.com
Luxury property values in Hong Kong will continue its decline for the rest of the year, but it won’t be a precipitous drop, property consultants maintain.
In a new report, Knight Frank predicts home prices in the Chinese SAR to decline by 5 percent to 10 percent for the rest of the 2016. However, the decline will transpire on a “gradual downward slope,” according to David Ji, Knight Frank’s director and head of research and consultancy for Greater China.
“If you look at the similar price trends in the mass market, which goes up and down, a sector impacted by various financial crises, policies and so forth, [in comparison]the prices in the luxury sector has been stable,” Ji told Forbes.
Of the five wealthy neighbourhoods tracked by the Knight Frank report, Pokfulam showed the steepest fall, with values decreasing 13.9 percent year-on-year to HKD21,728 (USD2,802) per square foot. Island South also registered an 8.7 percent fall over the past year, followed by Mid-Levels at 8 percent and The Peak at 5.7 percent.
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Luxury home values in Jardine’s Lookout and Happy Valley saw the only decline (-0.7 percent) among the five areas surveyed. Year-on-year, the area saw tumbles by as much as 5.3 percent.
Rental values remained stable in the Peak and Mid-Levels in July, the report also showed.
In anticipation of a hike in Fed rates by the end of the year, developers are expected to continue offering aggressive mortgage schemes and deep bargains to unload inventory, Knight Frank predicted.
“I think U.S. interest rates movement has bigger impact on buying luxury units than the general economy but we have to wait and see as Hong Kong is such a service-orientated economy now, so it depends on what the market is doing,” Ji told Forbes.
Read next: With banking expats leaving, who will rent Hong Kong luxury apartments?

Source : property-report.com
Read more…Hong Kong’s luxury market will fall, but how much?

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