Hong Kong Property Tips
Is Hong Kong Property A Good Investment In 2011?
There was a time when relations between Hong Kong and Mainland China was strained and posed such a negative impact on the economies of both parties. Realizing though how both sides were losing out on such an arrangement, moves were made to ensure strengthened economic relations which resulted in the establishment of Hong Kong as a business hub for the Asia Pacific region and the financial center of the international community. Large scale infrastructure projects which crossed boundaries are designed to promote a smooth flow of goods and people to gain significant efficiency and productivity for the economy. Constructions are spread across the mass residential, luxury residential, office market, and retail market sectors.
Why is now the best time to invest in the HK property market? One of the most compelling reasons is that GDP growth forecasts from 2011 to 2014 are expected to deliver 4% increase each year. Many economists believe that this is a forecast which can easily be transformed into reality once all mainstream construction activities have been completed. There is good reason for the positive outlook. In 2009 alone the residential property market displayed one of the strongest comebacks in the international community with the momentum still being felt up to the first quarter of the following year. Additionally investor-buyers from Russia, Japan, the Mainland, and other Asian countries were partly responsible for the buying spree that generated a growth in the economy.
When it comes to the mass residential sector the Central-City Leading Index which is an economic indicator climbed to 77.89 for the month of March 2010 which represents a 6.7% increase from December of 2009. Taking this into account the total market growth for the first quarter of 2010 alone is placed at 20% with a corresponding 22% increase in registrations. The integration of the economy of Hong Kong with the Mainland is attributed with this growth. The medium-term prospect for the Hong Kong property market in terms of the mass residential sector is vibrant with lower interest rates and an improved business activity. Some new properties in this sector have likewise solicited more positive responses from prospective buyers causing an upward trend in the mass residential sector.
Hong Kong Property Insights
In the luxury residential sector observations of the market by the end of the first quarter of 2010 showed a 6.5% boost against that of the same period during the previous year. The buying activity in this sector which cooled down substantially during the latter part of 2009 had picked up considerably partly because of the support from the business community as well as the increased demand from expatriates. The stabilization of this sector is seen as an influx of more high income groups seeking to buy into a high quality housing market. There seems to be minimal impact also on aggressive investors who are capitalizing on the end-user market for the luxury residential sector.
Due in part to the increase from the mass residential and luxury residential HK property sectors, the economy of Mainland China has achieved 11.9% growth for the year up to the first quarter of 2010. The economic growth has been sustained mostly through governmental efforts. The consistent activity and presence of the business community has likewise been very influential in sustaining the growth in these two sectors which have resulted in positive economic gains which is why the outlook remains positive up to 2014 at least.
From the second half of 2010 up to present the business activity of both local and outside investors have been very positive and is expected to continue at a constant pace despite the uneven recovery of global economies not only in the Asia Pacific region. Upholding Hong Kong’s current status as a business hub of the region as well as a financial center for the international community would not be a problem. This is because of the widespread and large scale projects for infrastructure development. This is a necessary step not only to the recovery of the economy but also in the efforts of sustaining it. When it comes to efficiency and productivity of local businesses this is likewise seen as a contributory factor to its continued growth.
Because of these factors the office market sector seen as going towards a positive trend. This observation is supported by the continued disposal of available office spaces. In the same manner, many multinational companies who once held regional offices in Hong Kong are now slowly coming back to reestablish themselves. This positive business activity is surely a boost to the local economy and supports every forecast of a positive outlook from 2011 to 2014 and most probably even beyond. For many observers of the office market sector this will also translate to availability of more high quality office spaces in the very near future. To help sustain this growth low interest rates and continued capital influx are going to be vital. The labor market, improved prospects, and increased corporate earnings will help maintain the upward move of the office market sector and build momentum for the coming years.
The retail market sector will not be left behind by this growth. The Retail Sales Index value for this sector has reflected upward trends during the past months which are a clear indication of improving local consumption. Improving market conditions as well as increasing income is pointed out as prime contributory factors to the upswing experienced by the retail market sector. Tourism has likewise been on track, and together with the stabilization of the economy of Mainland China it is expected that the number of foreign visitors will be on a steady incline for the next few years at least. Governmental package measures for the year 2010 and 2011 which are incorporated into the budget will also serve as an engine for growth. Retail shop transactions are forecasted to remain active proportional to the growth of the retail market sector as well as the retail leasing industry.
With such positive market outlooks for the mass residential, luxury residential, office market, and retail market sectors including the growing demand from investors it is expected that the best time to be a part of the Hong Kong property market is now. Governmental support for sustained business activity and the influx of tourism will help sustain the momentum in the coming years which you can take advantage of right now.
Dealing With Hong Kong Property Agents
The real estate representatives or agents must get a license to do the real estate work after the formation of ‘Estate Agents Authority’ in 1997. The agents will provide the name card in which their license number will be displayed clearly when they meet their customers. They should also have their official license card. HK property is already more expensive and Discovery bay in Lantau is formed to be one of the very expensive place in Hong Kong to live.
Hong Kong’s physical geographic restriction means there are limited supply of commercial and residential real estate which are available for rent and sale. As Hong Kong strengthens further its already strong built trade, investments and economic ties with China, the demand for its real estate is intensifying.
There is always a competition for the space in Hong Kong among the multinational companies and by their expat employee base, local residents, local businesses, students and tourists. In fact, the demand for Hong Kong property for commercial and residential space is highest today. After suffering an acute recession from the year 1998 to 2003, the real estate market today is in a great position to grow and expand as Hong Kong’s economy has become strong.
The international real estate investors are buying and investing substantial funds into Hong Kong property. Unlike other countries, there are no restrictions placed for the foreign investors, in other words, anyone is allowed to purchase Hong Kong property. They can get mortgages locally to purchase and earn rental income from it if the investors prefer to purchase commercial or residential units.
Today, Hong Kong property market has attained a boiling point lightened by some factors like positive market sentiment, low interest rates and the “trump card” the Mainland Liquidity. The prices of Hong Kong luxury properties have increased, say by more than 15%. Basically today’s economics are more capable of being sustained when compared to that of 97 property bubble. With no unexpected crises or increase in rate of interest, the prices seem to be sustained. HK property markets are good when examining the analysis which shows that the number of renovation and the new development projects which started in the recent years is low.
With these factors it is very clear that Hong Kong property market seems to have highly attractive prospects.
