Property transactions up 20% in June
Updated: 2009-07-04 08:17
By Liu Yi Yu(HK Edition)
A bird's-eye view of some of the high-end residential apartment buildings at Midlevels in Central, Hong Kong, seen from the The Victoria Peak. Bloomberg News
HONG KONG: Property transactions in Hong Kong continued to climb in June as the Land Registry reported a 20.5 percent increase from the previous month and a 32.6 percent rise from a year earlier.
The total number of sale and purchase agreements signed, a gauge of activity in the property market rose to 15,747 in June from 13,067 in May while the total value of agreements signed amounted to $58.2 billion, a 32.2 percent rise from May but a 1.4 percent decline year on year.
Among the agreements, 13,805 were for residential units, which brought $49.7 billion worth of property.
In the meantime, revenue from land transactions in June doubled to $2.8 billion compared to $1.4 billion last month and $2 billion a year earlier.
The buoyant property market reflects investors' confidence about the industry's outlook.
Prices in Hong Kong's residential property market can rise as much as 10 percent by the end of this year, according to New World Development, one of the key players in the business, while office property prices are expected to rebound as much as 34 percent this year, according to international property consultancy firm CB Richard Ellis.
Despite the financial woes, favorable mortgage rates and expectations of an economic recovery keep fueling sentiment in the property sector.
"Hong Kong's real estate market is rather sensitive to mortgage rates, which are likely to remain low for some time," said Marco Mak, the head of research at Taifook Securities. "A long-time low rate could easily offset possible fallbacks on rents."
As long as the rents are above the deposit interests, it's an attractive investment, Mak added.
The property market was back on track in the first half of this year and has returned to a similar level as the same period last year. A revival in the property sector has taken hold since February when a market trough attracted investors to buy low.
A limited supply of new apartments and money from the mainland has also helped lift property prices, according to the analyst.
However, he forecast that growth would narrow in the third quarter after soaring in the second quarter.
He also noted that the property market in Hong Kong is already mature and almost saturated and therefore more local developers would tap into the mainland market.
(HK Edition 07/04/2009 page2)