Everything about Landscope Christie's International Real Estate and the Hong Kong luxury property market
This year will go down in Hong Kongâ€™s real estate history as the beginning of a new era, when the ecology of the market changes as the newly-elected Chief Executive of Hong Kong SAR, Leung Chun-ying, takes over the reins from Donald Tsang on 1 July, 2012.
Some people think estate agents are not necessary, citing poor service standards or even complete lack of service at some agents, as well as the availability of many free property websites that carry a large number of property listings. I have sometimes heard assertions that estate agents can be dispensed with in Hong Kongâ€™s transparent and mature market. I think, however, these people have confused functionality with service quality.
Recently, government officials have been rejoicing over the decline of property prices in the last six months, attributing the market softening to a series of clampdown measures against property speculation which they put in place in late 2010. These measures include, among other things, the introduction of a Special Stamp Duty (up to 15 per cent additional stamp duty levy if the property is resold within two years of purchase) and the lowering of mortgage ceilings by 10 percentage points (which means for luxury properties the loan to value ratio is 50 per cent).
2012 started with a gloomy outlook amid the hitherto unresolved Euro debt crisis and Chinaâ€™s decelerating economy; as investment sentiment in Hong Kong hit a low in recent years. It has become a majority view that the local economy will slide for the whole of this and possibly next year too. Against this backdrop, investors are staying put and end users are pushing back purchase decisions. In the high-end residential market, desperate sellers are widening negotiation margins to 10 per cent or more, where they used to be no more than five per cent.
Amid the global financial turmoil and associated property downturn, London is perhaps one of the few remaining bright spots. Investment funds pour into this financial hub, now a safe haven for capital from all over the world. The rollercoaster ride of the worldwide equity markets stemming from the Euro crisis has sent shockwaves through most western economies â€“ and caused jitters in Asia as well, resulting in the withdrawal of capital, some of which is finding its way into mature, stable real estate markets like London.