According to a report from Jones Lang LaSalle, the property market in Hong Kong remains strong in spite of a slowdown in sales volume. The report points towards low interest rates, limited space availability, corporate expansion and strong consumption as the reason for this continued growth.
The Hong Kong government imposed cooling measures over the last year, and this led to an initial slowdown in sales growth during the first six months of 2011. There were a total of 55,200 sales and purchase agreements during the last six months, and this is 16% less than the previous year, but with the number of transactions averaging 9,200 per month, this level is still considered to be healthy.
There were 1,260 transactions for property valued at HK$20 million or more, during the first six months of this year, and although this is 33% less than the last six months of 2010, it is still 7% more when measured on a year on year basis.
The total of these transactions was HK$59.4 billion which is 20% less than the second half of 2010 but 11% more year-on-year. In fact the capital values of luxury property has increased by 16.2% this year, and rents have gone up by 4.9% which is mainly due to demand from corporate expatriates.
The overall price of residential properties has increased by 10.1% this year, and this increase is mainly due to higher household incomes and a lack of available housing. Sales of new properties have slowed as just 4,700 new units were sold between January and May, while 13,600 units were sold during the previous 12 months. Experts expect sales volumes to remain low for this year, but don't see any real market risks.
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