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HK luxury house fetches near-record price

Posted on 18 Mar 2010 | Comments Off

HK$280m paid for Peak property on Severn Road

A Hong Kong listed company said yesterday it will buy a luxury house for a near-record price in the city, a month after the government introduced measures to cool the city’s property market.

Sino-tech International Holdings, an electronics components maker, said it has agreed to buy the 4,650 square foot property on the Peak for HK$280 million (S$50.42 million), or HK60,215 per square foot, as an investment.

The per-square-foot price is among the highest paid for a property in the southern Chinese city, after a duplex was sold by Henderson Land Development in October for an Asian record of HK$71,280 per square foot.

The Peak property is one of the 22 houses in the luxurious Severn 8 development on Severn Road, which was named by online analysis group The Wealth Bulletin as one of the 10 most expensive streets in the world last year.

Also on the list were Chemin de Saint-Hospice in the South of France, Fifth Avenue in New York, and Kensington Palace Gardens in London.

The near-record price was reached despite a series of measures the government introduced in February to cool the white-hot property market, such as increasing residential land supply and stamp duty for luxury flats.

John Tsang, the city’s financial secretary, said the government was worried that the property frenzy, supported by strong demand from rich mainland buyers and a big inflow of funds, would create a bubble and affect the stability of the financial system.

Prices of some luxury flats returned to the peaks of the 1997 property boom in January, Mr Tsang said.

Stimulus measures by governments around the world have boosted liquidity, which has lead to large fund inflows into Asia.

China has also seen soaring property prices, with values rising at their fastest pace in 17 months in December after Beijing encouraged tax breaks, loans and lower downpayment requirements to boost the sector during the slump.

Source : Business Times – 18 Mar 2010

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Buy real estate, property funds: Aberdeen

Posted on 18 Mar 2010 | Comments Off

Investors should buy real estate assets and funds that invest in property in the UK and Asia because a potential rebound in prices and economic growth will counter inflation risks, Aberdeen Asset Management Plc said.

While UK properties offer ‘attractive’ yield, real estate in Asia is supported by the strength of the region’s economic growth, Michael Turner, head of global strategy and asset allocation at Aberdeen, said on Tuesday.

He recommended buying into real-estate investment trusts and funds that hold property, without giving specific names.

‘People should allocate more money than they do now in real estate as a hedge against inflation,’ Mr Turner said. ‘Real estate, whether or not there’s inflation as a result of macro policy, is attractive in its own way.’

China, India and Australia have tightened monetary policy to curb inflation as the global economy recovers from the worst recession since World War II. Interest rates in advanced economies can remain accommodative for an ‘extended period’, while policy in ‘a number of emerging economies’ may have to be tightened ‘relatively soon’ because of signs of accelerating inflation or credit booms, the International Monetary Fund said in a Jan 19 staff note.

Minutes from the Australian central bank’s March meeting, released on Tuesday, said that policymakers raised borrowing costs this month for the fourth time in five meetings because the risk of faster economic growth stoking inflation outweighed the potential for renewed financial market turmoil.

In the US, where the housing market is still flat, the Federal Reserve on Tuesday repeated its pledge to keep its main interest rate near zero for an ‘extended period’.

It is a different story in Asia and Britain. UK house prices rose in February at the fastest pace in more than seven years, research group Acadametrics Ltd said on March 12. Nine of 10 Britons say that buying a home is a ’sensible investment’ even after the nation’s worst housing slump in three decades, a survey by YouGov Plc published on March 2 showed.

In Asia, property prices have risen as economic growth in the region outpaces the rest of the world’s. Hong Kong’s home prices surged almost 30 per cent last year, Centaline Property Agency Ltd said this month. Australian home prices jumped 13.6 per cent in 2009.

The World Bank forecast in January that the global economy would expand 2.7 per cent this year. China’s economy, the world’s third biggest, will top last year’s 8.7 per cent growth rate in 2010, the nation’s central bank estimated this month.

Singapore’s gross domestic product is forecast by the government to grow between 3 per cent and 5 per cent this year.

Source : Business Times – 18 Mar 2010