Hong Kong to continue growth in 2011
December 25, 2010 - Hong Kong
Despite government cooling measures, record highs and a still volatile global financial climate, Hong Kong's property boom seems set to continue in the new year.
Although a short breather is expected in the first quarter thanks to the government cooling measures, Hong Kong domestic properties are expected to climb 10 per cent throughout 2011 having already jumped by some 50 per cent since the beginning of last year.
This has no doubt raised developers' anticipation and the government's cautionary stance.
During a government land auction, a plot on Ede Road in Kowloon Tong sold for over US$200 million to developer Chinachem.
At more than USD2300 per square foot, it was a record price for sites on the Kowloon Peninsula.
Some economists said much of the market continues to be fuelled by hot money from mainland buyers and investors, rather than end-users, but a market pumped on liquidity, low interest rates and tight supply has meant a boon regardless of more government land sales, capping mortgage-lending, the banning of flipping sales contracts and an additional 15 per cent stamp duty on properties sold within two years of purchase.
Some economists say a bubble has already formed, but they believe the current measures will help to slow down speculation in the market whilst others say a correction could be in store at the end of 2012, as banks may raise interest rates to battle inflation.
Source: Property Report
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