Everything about Landscope Christie's International Real Estate and the Hong Kong luxury property market
The lull of the luxury property sales market continued into April, as transactions on all fronts shrank further. Buyers are all holding back and adopt a wait-and-see attitude. The ending of US subprime mortgage woes and credit crunch in major financial markets is not in sight, and the fallout has serious impact on property markets worldwide. Corrections are seen in the US and many countries in Europe, and also in Hong Kong and Japan. China's property market cannot escape the same fate although for a different reason.
Last week the US Federal Reserve pumped US$200 billion into the banking system in an effort to bail out some of the cash-strapped banks and to relieve the tightening credit stemming from the worst property market slump in the US in decades. The aftermath of the property slump begins to surface and is making deep repercussions in other economic sectors.
After a short lull following the Chinese New Year, the luxury property market is quickly gathering momentum for another surge, as evidenced by increased enquiries and property viewings beginning this week. Market optimism is underpinned by the negative interest rate, the healthy economy and the fact that the tight supply situation is not going to change for a long while, as the government steadfastly maintains its high land price policy.
Successive financial and administrative measures to reign in the runaway stock and property markets on the Mainland are beginning to take their toll. In major cities like Beijing. Shanghai, Guangzhou and Shenzhen, property transactions plummeted and forced many property agents out of business, some of which have nation-wide agency networks. On the other side of the globe, the US is fretting a recession as Wall Street braces for one of its worst quarterly losses in history. In an effort to contain the aftermath of sub prime mortgage woes, the Bush administration is preparing for a series of salvation plans.
The recent subprime mortgage turmoil in the US and the subsequent credit squeeze in the leading economies have caused a series of turbulence in world stock markets. Coupled with a simultaneous decline of the US housing market and a very cautious outlook of the US economy, major stock markets can expect more rough rides ahead. In mainland China, the central government has stepped up its crackdown on the overheated economy and rampant property speculations by introducing successive increases of interest rate and anti-speculation measures. The property markets in Beijing. Shanghai and Shenzhen are feeling the crunch, with transaction volume having shrunk by 50% to 70%. Price drops are recorded across the board. The outlook is nothing short of gloomy.