Residential sales activity has seen a decline in the last quarter due to bank tightening measures including lowering of loan-to-value ratio and the government’s announcement of a special stamp duty on residential sales transactions, to curtail the housing boom in Hong Kong. During the period between November 2010 and April 2011, the number of overall residential transactions dropped significantly by 42 per cent. However Hong Kong’s residential price index has increased by 20% since the end of 2009.

The Asian luxury residential leasing market remained firm during the quarter with the CBRE luxury residential rental index rising by 1.8% q-o-q. Hong Kong registered the strongest rental growth regionally. Despite the latest round of government measures aimed at curbing speculative demand, luxury residential prices in Hong Kong grew strongly by 7.3% q-o-q in 2Q11, due to continuing rental growth and tight supply, according to the recent Residential Index from Jones Lang LaSalle’s research team. In the twelve months to end-2Q11, Hong Kong delivered the strongest price performance among the monitored markets, with growth of around 28%.

3.

Over the past year luxury residential prices have shot up to 28%. According to Jones Lang LaSalles’s report Luxury residential prices are generally likely to remain stable or see slower growth for 2011 due to ongoing policy and interest rate risks. Prices in China are expected to either remain flat or edge down slightly over the rest of this year as developers will likely introduce more price discounts and launch less high-priced units over the next 12 months. Prices in Hong Kong and Singapore should remain largely stable over the second half of 2011, buoyed by continued demand from end-users and long-term investors.

4.

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.

5.

Property tax is payable in Hong Kong and is computed at the standard rate on the net assessable value of the property. The standard rate has been reduced to 15% for 2008/2009 onwards (it was previously 16%). There is not a capital gains tax in Hong Kong. Detailed information can be found on the Hong Kong Inland Revenue Department website.

6.

The Hong Kong Land Registry received 162,739 sale and purchase agreements for all building units received for registration in 2010. This was a 21.5% increase compared with 2009 and a 43.6% increase compared with 2008.

7.

The number of sale and purchase agreements for all building units received for registration in April 2010 was 14,300 (+12.5% compared with March 2010 and +28.3% compared with April 2009). With the high level of transactions, the overall luxury residential price index maintained its momentum, increasing 9.8% q-o-q, almost hitting 1997’s peak.

8.

The current economic climate is proving to be conducive towards investment and purchase of property in the Hong Kong Residential Property Market. International mortgages are an attractive option for many investors. Healy Consultants assists clients obtain the most competitive finance for their investment, working with international banks such as HSBC, ANZ Bank, DBS Bank and OCBC Bank.

 

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