Park Island Property Performance Summary for 2011

Well as the end of the year approaches, lets see how Park Island fared in terms of property prices compared to the rest of Hong Kong.



Park Island Transactions 2011



The lower line on the graph shows the average performance of all Hong Kong properties over the 2011 year. As you can see Hong Kong prices rose around 10% in the first 4 months of 2011, and then stayed pretty much at the level for the rest of the year.

Park Island prices (the upper line on the graph) rose continuously for the the first 6 months, up around 20%, and then remained at that level for the rest of the year.

Transaction volume (the bottom bar graph) dropped noticeably over the last 6 months of the year both for Park Island and for Hong Kong generally.

My predictions Hong Kong property prices in  2012.

1 - The Government will ease off a little on the measures that caused transaction volumes to become so low. Property agents are hurting, and so I expect property transaction volume will be 20-30% up from the lows we have now.

The effect of the newly imposed stamp duty rule that if you sell within 2 years will deminish as we approach the 2 year mark from when this measure was first announced, and possibly the massive downpayment requirement imposed on banks who provide mortgages will be eased a little, making it easier for people to borrow to buy. China monetary policy easing will also lead to more investment money flowing into Hong Kong.

2 - Hong Kong prices will stay relatively stable, perhaps 5% down in the first few months of the 2012 year, and then ending around 8-10% up over the entire year.

Interest rates will remain low and Reserve Banks will continue to pump money into the economy.

3. Park Island will continue to outperform the Hong Kong properety market. Perhaps 5% down in the first few months of the 2012 year, and then ending around 12-15% up over the entire year.

Park Island is still exceptionally good value, and still relatively "unknown". The trend of higher income people, especially expats seeking a clean high quality place to live, will continue even stronger than it was in 2011.

4. With regard to rental prices, I think things will be relatively stable, rising perhaps 5-10% with rents on Park Island being between $18-$22 per square foot for "standard apartments", (prices for rooftop apartments obviously being significantly higher).

One interesting factor for Park Island in 2012 will be the possible launch of the Phase 6 Park Island villas. It remains to be see what effect the marketing of these villas will have, but if anything it will surely be a positive effect on the entire Park Island market, as potential buyers are introduced to Park Island as a property investment.