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HK property on the fast track to recovery

Posted on 29 Sep 2009 | Comments Off

Home prices 26% up this year, erasing Q4 ’08 post-Lehman loss

Hedge fund manager Pan Lin Feng and two friends sensed opportunity when Hong Kong property prices plunged 20 per cent last year after Lehman Brothers Holdings Inc collapsed.

In November, they bought a 1,500 square foot apartment, more than double the size of a typical Hong Kong flat, in the affluent Mid-Levels district for HK$9.8 million (S$1.8 million) from an owner shoring up stock and property losses. In July, the trio was offered HK$15 million.

‘It was a good deal,’ Mr Pan, 33, said. ‘It was real luck and everyone has benefited since.’

Hong Kong home prices are up 26 per cent this year, erasing losses posted between the Sept 15, 2008 demise of Lehman Brothers and Dec 31, 2008, according to the weekly Centa-City Leading Index. Mainland Chinese buyers and record mortgage rates lower than London and New York enabled Hong Kong to recover while the other financial centres struggle.

Hong Kong is the world’s fifth-most expensive residential real estate market, after Monte Carlo, Moscow, London and Tokyo, according to Global Property Guide. Continue reading →

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Posted in Overseas Property

Tagged Hong Kong Property, Hong Kong Property Market

Hong Kong office rentals arrest decline

Posted on 24 Sep 2009 | Comments Off

Despite the slower pace of rental falls and increased leasing activity, vacancy rates are climbing, says UMA SHANKARI

THE Hong Kong office market is mirroring the trend seen lately in the Singapore market – rents are still falling, but at a slower rate. Data from property firm Savills showed that overall Grade A office rents fell by 5.8 per cent in the second quarter of 2009. This is a slowdown from the decline of 11.1 per cent seen in Q4 2008 and 10.2 per cent in Q1 2009.

‘The results indicate that the rate of decline of office rents has slowed, suggesting that we are approaching the bottom of the current down cycle,’ said Savills in a report.

Savills Research now expects the rate of decline of Grade A office rents to slow over the second half of 2009 and record another 10 per cent slide for the remainder of 2009 before stabilising.

Knight Frank, which does monthly rental updates, noted that the month-on-month decline in the average Grade A office rent slowed to 1.9 per cent in July, after falling 3 per cent in June. Knight Frank expects that Grade A office rents will bottom out by Q4 of this year.

The trend is similar to what is happening in Singapore. Office rents in Singapore fell for the fourth consecutive quarter in Q3 2009, but the pace of decline has eased on the back of returning business confidence, said CB Richard Ellis (CBRE). Continue reading →