Everything about Landscope Christie's International Real Estate and the Hong Kong luxury property market
Despite the successful sale of Soho 38 in Midlevels Central. the property sales market is still suffering from significant drop in transactions. The more pessimistic outlook of property market has prompted sliding of property stocks in the stock market. which is already long battered by the global credit crunch and slowing major economies.
The luxury property sales market continued its lull in the summer. There were sporadic transactions in the Southside. nothing significant in value. In Midlevels and Happy Valley. sales were just a fraction of the heyday; and again, nothing exciting. We don't expect to see any significant change in status quo for the remainder of the year.
Like it or not. the market is not moving in the direction most people would prefer it to. It's clich'again the market is plagued by the adverse affects of a tight monetary policy on the Mainland. declining stock market. high oil price and surging inflation. The property market is feeling the pain. with dwindled sales across the board and softened price in many upscale locations.
There are strong signals from the US that the interest rate reduction may be coming to a halt, as various indicators are showing a declining economy. It is too early to tell if the rate will reverse its direction immediately when inflation is gathering momentum. One thing is for sure. the US government is caught in a dilemma. The struggling economy needs low financial cost to bail itself out of recession, but inflation is feared to spin out of control if not reined in by higher interest rate and tighter credit control.
Despite a further interest rate reduction by the US Federal Reserve. Hong Kong banks have not followed suit. The local banks. like their international counterparts. are facing credit crunch stemmed from the US subprime mortgage woes since last year. It is not easy to make borrowing even in the interbank money market. thus many local banks are not able to lend as much they'd like. The money supply squeeze has thus far affected the local property market as investors find it more difficult to obtain the necessary leverage for normal investment activities. Likewise. the end users market is inevitably adversely affected.