Hong Kong residential real estate prices rose 25% in 2007, a sudden surge compared to the softer 4% growth in 2006. However, the last quarter saw significant price declines in the residential market. Overall transaction volumes in the last quarter of 2008 were also significantly lower than the corresponding period in 2007. The following information will help you determine whether Hong Kong real estate is the optimum strategy to fulfill your international strategic investment objectives:

1.

Reasons for previous Hong Kong real estate downturns included i) excess supply ii) rising interest rates and iii) high property prices eroding buyers’ affordability. The current situation is different, however, with tight supply, low interest rates and more favourable affordability.

2.

Hong Kong real estate remains vulnerable to global financial market turbulence and uncertainties over the US sub-prime mortgage crisis. The credit crisis and barriers to obtaining finance are factors that will impact on property market prices.

The luxury end of the market, especially, is expected to decline further in 2009. As seller expectations decline sales volumes are likely to increase.

In April 2009 the Hong Kong Land Registry received 9,856 sale and purchase agreements for residential building units. Compared to April 2008, this represents an increase of 9%. The increase in total value was also approximately 1.85%.

5.

Hong Kong's vibrant city and nightlife is attractive for many foreigners as a place in Asia to live and work, hence making Hong Kong real estate and migration to Hong Kong popular for global investors. In the Mercer 2009 Quality of Living survey, conducted by Mercer Human Resource Consulting, Hong Kong ranked 8th out of 215 cities around the world in terms of infrastrcture. Many executives have relocated from Hong Kong to Singapore in recent years, citing health concerns from living in Hong Kong caused by environmental pollution.

6.

Colliers International reports that according to the Land Registry of the Hong Kong SAR Government, the number of building unit transactions increased 59.9% month-on-month (MoM) to 8,062 in March 2009.

7.

Hong Kong boasts low corporate and income tax, a stable government, excellent geographical location and economic freedom. As such, many international companies have made Hong Kong their headquarters, contributing to traditionally strong demand for Hong Kong commercial property. There are no restrictions on any individual or corporation, whether domestic or overseas, to own Hong Kong real estate.

8.

Stamp duty taxes are payable on the purchase of Hong Kong real estate, the rate of which varies according to the total cost of the property. Owners of buildings in Hong Kong are charged property tax, which is based on the property's rental income. The rate of tax is 16% on the annual rent receivable less a statutory deduction of 20% for repairs and outgoings. Detailed information can be found on the Hong Kong Inland Revenue Department website.

9.

Because of the current economic climate, it is becoming increasingly difficult to obtain finance to support Hong Kong real estate investment. Interest rates for mortgages in Hong Kong are in the range of 3-3.5%, Asia Property Consultants assists clients obtain the most competitive international mortgages for their investment, working with international banks such as HSBC, ANZ Bank, DBS Bank and OCBC Bank.

10.

Asia Property Consultants independently assists international property investors effectively and efficiently manage all aspects relating to the purchase and sale of Hong Kong real estate. Whether the client is seeking residential property if migrating to Hong Kong, commercial property for business needs or as property investment to expand global assets, we source latest real estate market information to enable us to offer honest, reliable opinions on i) Hong Kong real estate cycles ii) the current and future outlook for Hong Kong real estate and iii) expected interest rate and currency movements and their impacts on Hong Kong real estate. In addition to our own experiences, our sources include statistics and forecasts from reliable, reputable sources including the Hong Kong Ratings and Valuations Department, Invest Hong Kong and the Hong Kong Monetary Authority.

For more information on the Hong Kong real estate, call our Hong Kong office at (+852) 8331 1911 or contact us at email@healyconsultants.com