Hong Kong real estate market is constantly rising

10/12/2017   Viewed: 843
The Hong Kong property market has yet to see signs of cooling down and could rise by 10% next year.
Housing prices in Hong Kong have risen 11% this year, despite those waiting for the bubble to explode and the government's restraint efforts through a series of taxes and mortgage restrictions.

The easy rise could make Hong Kong fall into a bubble, according to the UBS Global Real Estate Bubble Index. However, housing prices in the mass market in the city will still increase by 8 to 10% next year, according to real estate consultancy Colliers International Group. Meanwhile, Knight Frank LLP expects house prices to rise 5%, and luxury housing prices up 8%.

The market has been very hot in recent months, as investors poured money into real estate. Buyers have set records from luxury homes to undeveloped land. They also conducted blockbuster transactions for real estate in the central district of Hong Kong.

"The market is so hot because hot money is flowing in. The record is also coming, "said Raymond Ho, deputy director of development and investment at Savills.
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Real estate prices in Hong Kong may continue to rise by 10% in 2018. Illustration

Property prices in Hong Kong are continuously rising for many reasons. First, people's needs far outstrip supply. Each year, only about 20,000 apartments are launched. This figure is enough to meet the need for 20,000 Chinese to become permanent residents in Hong Kong each year, helping them avoid taxation on foreigners. The number of unsold apartments in Hong Kong in the third quarter dropped to its lowest level since 2015.

Secondly, rich developers are enticing buyers. At the Cullinan West project - the latest apartment on sale today, Sun Hung Kai Properties is offering a package of up to 120% of the apartment financing. Many other investors offer interior packages or preferential loan rates for the first three years.

With that in mind, the mortgage war between banks is becoming very intense in the context of all of the rising interest rates. Hong Kong's largest bank, HSBC, will offer low interest rates to its customers. The bank is offering some customers a 1.28% interest rate on the Hong Kong interbank offered rate, if they are offered similar offers by other banks.

Finally, Chinese investors have contributed to the rise in land prices in Hong Kong. According to Colliers, non-Hong Kong developers accounted for 68 percent of the government's purchase of land this year.

In February, two Chinese companies paid a record high of $ 31,000 per square meter in a riverfront area. This will result in higher apartment prices when completed.

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