Hong Kong real estate Market
For the wealthiest citizens in Hong Kong, the New Year is off to an auspicious start as their fortunes continue to rise, due in large part to a buoyant real estate market. Though the city has built its reputation as a financial center, it is in cement and mortar that the most fabulous wealth is made.
Real estate prices in the city surged by about 13.3% in 2014 to a new record, compared with a 1.3% increase in the local stock market, the benchmark Hang Seng Index, over the same period, according to Centaline, the top property broker in Hong Kong.
Meanwhile, right across the border, China’s property market has been in a long funk.
A raft of market-cooling measures implemented by Hong Kong’s top politician, Chief Executive C. Y. Leung, has helped stabilize the luxury residential sector. But these measures have also served to divert money from investment funds into commercial real estate. The end of quantitative easing by the US Federal Reserve will dent the red-hot residential market in Hong Kong through the effect of interest-rate hikes on mortgages taken by local home buyers. It is not expected to have as much impact on the performance of commercial real estate, however.
It’s because Hong Kong’s economy is still in good shape, said James K.T. Cheung, executive director of the valuation department at Centaline Surveyors, adding that “Unless it gets so bad as to affect business. Tenants will still have to pay their rents.”