Most major analysts agreed that going in to 2007 the Hong Kong property market was set up as an exciting prospect for established investors - but if you’re not there already is 2007 actually a good time to enter the Hong Kong property market for newbies? We examine the market climate…
2006 got off to a shaky start in terms of the Hong Kong property market, however all sectors of the real estate economy recovered well by the fourth quarter of the year and some such as office and high end residential recovered exceptionally well setting the market up for a positive start to 2007.
Whereas 2006 started out relatively badly for the property market in Hong Kong, as we enter 2007 most fundamentals point to a positive property market in Hong Kong with demand outpacing supply in both residential and commercial property sectors for example, and better affordability factors boosting both rental and resale real estate prices.
New quality property stock is due to come to the market in the form of off plan units, attractively priced Home Ownership Scheme apartments will be made available for immediate occupancy during the course of the year, the demand for grade A office space is far outstripping supply, lower unemployment, better rates of pay and an increase in inflation are all additional factors that analysts are citing when they predict that property in Hong Kong is due a positive year in 2007.
When researching current activities, trends and opinions within Hong Kong’s property market, the signals being received are definitely mixed. On the one hand reputable sources such as Bloomberg and the Herald Tribune are reporting a 30% drop in the value of property related transactions in the first half of 2006, and on the other hand leading real estate industry players in Hong Kong are reporting steady and sustainable growth.
Hong Kong is continuing to benefit from its close ties with rapidly developing China and this month the Hong Kong property market drew strong investor interest from both Morgan Stanley and the Australian industrial real estate investment trust Macquarie Goodman Group.
There’s no doubt about it according to Colliers International, 2006 will be a strong year for growth and demand in Hong Kong – but property investor interest is restrained and will remain so until the second half of the year.
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