Centa-City Hong Kong Property Index.
A few people have emailed me noting that according to the Centa-City Hong Kong Property Index, Park Island was the largest gainer in terms of price increase over the last month. I have checked to confirm this and it seems to be correct.
Here is a snapshot of the overall Hong Kong Property market price graph:
And here is the data for Park Island property prices:
As we can see, Park Island prices jumped a massive 16.02% over the last month.
Transactions for Park Island are at a yearly high for the month of July already (according to agents I have spoken to), and July is of course still has a few weeks to go, so it seems July will have the largest volume of monthly transactions over the last year.
Basically what has happened is that the standoff between sellers who refused to reduce prices in light of cooling measures and increased stamp duty, and buyers who refuse to buy due to these increased transactions costs, has ended. Buyers, it seems have decided to grin and bear it, buying now in the belief/fear that prices are about to start rising. The large gains for Park Island, in my view, are due to the fact that Park Island represents outstanding value. I know for a fact that many residents of Park Island (and in other parts of Hong Kong) were waiting it out and saving up hoping to see where the market would bottom, and have decided that now is the time to jump in.
In my view, buying now makes some sense. Interest rates may well stay low for longer than we had anticipated. And arguably, buying now, with cooling measures and increased transaction prices "priced in" means that if/when these measure are ever removed (and I am sure they will be eventually), owners will reap the 20% or so gain in price (which right now is being taken by the Government). Combine that with relaxed lending ratios from banks (likely to happen when interest rates start to rise) and, overall buying now makes sense.
I have also been asked whether there is buying by people "in the know" regarding car access for residents etc. The answer to that is no - there is nothing I know beyond what I have written here previously.
I'll end this post with a prediction. Right now Park Island is selling at $9017 psf (gross). I'm picking %10,000 psf by the end of the year (based on CCI property data). Anyone else care to make a guess?
Here is a snapshot of the overall Hong Kong Property market price graph:
 |
| CCI Hong Kong Property Index |
As we can see, Park Island prices jumped a massive 16.02% over the last month.
Transactions for Park Island are at a yearly high for the month of July already (according to agents I have spoken to), and July is of course still has a few weeks to go, so it seems July will have the largest volume of monthly transactions over the last year.
Basically what has happened is that the standoff between sellers who refused to reduce prices in light of cooling measures and increased stamp duty, and buyers who refuse to buy due to these increased transactions costs, has ended. Buyers, it seems have decided to grin and bear it, buying now in the belief/fear that prices are about to start rising. The large gains for Park Island, in my view, are due to the fact that Park Island represents outstanding value. I know for a fact that many residents of Park Island (and in other parts of Hong Kong) were waiting it out and saving up hoping to see where the market would bottom, and have decided that now is the time to jump in.
In my view, buying now makes some sense. Interest rates may well stay low for longer than we had anticipated. And arguably, buying now, with cooling measures and increased transaction prices "priced in" means that if/when these measure are ever removed (and I am sure they will be eventually), owners will reap the 20% or so gain in price (which right now is being taken by the Government). Combine that with relaxed lending ratios from banks (likely to happen when interest rates start to rise) and, overall buying now makes sense.
I have also been asked whether there is buying by people "in the know" regarding car access for residents etc. The answer to that is no - there is nothing I know beyond what I have written here previously.
I'll end this post with a prediction. Right now Park Island is selling at $9017 psf (gross). I'm picking %10,000 psf by the end of the year (based on CCI property data). Anyone else care to make a guess?
Good post. How about price trend for rentals. I spoke to an agent today who said you would be rare to find a two bedroom place for under 15K a month, yet I have friends renting for less right now.
ReplyDeleteNever thought I'd say it but yes 10k PSF is possible.
ReplyDeleteWe will be looking to buy shortly and it will be below 9000 per square ft.
ReplyDeletePart of what is happening is that older and original owners on Park Island whom are mainly local HKers are selling and the buyers have more money being expats and mainland buyers. When I first move to PI we had very few expats whereas now it's becoming a lot more like DB in terms of expats.
ReplyDeleteI do think prices will go up this year. But will they hit 10000psf? I doubt that, but if so, great.
ReplyDeleteIn the meantime, I don't mind as already an owner. Hmmm I think I'll just go relax in the pool now...
Selfish comment. Think about new arrivals not yet HK PRs who need to pay excessive stamp duty if we wish to buy and in the alternative risk being milked by greedy land lords.
ReplyDeleteI think around 9500 psf. That's around a 5 or 6% increase over the next 6 months which is already pretty big. Might go higher due to pent up demand though if the recent pickup in the market is anything to go by.
ReplyDeleteRental prices will increase at the same time as the purchase cost. In Hong Kong, it seems that they apply a blanket formula for calculating this.
ReplyDeletePark Island Blogger, would you be willing to do an interview with a property magazine? We are currently considering doing a feature article on Ma Wan.
ReplyDeleteYour Park Island blog has provided some very insightful commentary on the Hong Kong property market. Where do you see Hong Kong property prices for 2014? Whilst there are pockets of value such as Park Island don't you think the Hong Kong property is vastly overvalued, not to mention overrated as an investment?
ReplyDeleteImpossible to see where it is going. Investors were already saying the exact same thing 5 or 6 years ago. They kepis saying how overvalued it was and how it was going to crash. And look how wrong they were. You could have bought 2 years ago and sold today with a 35% price gain. Maybe the same will apply today. Buy today and sell in 2 years with another 35% price gain.
ReplyDeleteIts inevitable that long term prices will rise in HK. That has always been the case. Limited supply with more people = more demand = higher rentals and therefore higher prices.
ReplyDeleteShort term is about timing. I do think Park Island will break new records but that is because Park Island is coming off a very low base. You need to remember the history of Park Island. It was originally intended as a very high end resort-type development. But the first launch had terrible timing and it ended up a lot of "lower-end" people bought at very low prices. It only really became upmarket once the secondary market realized the value. So in turn resulting in continued upward prices. If the entire Park Island was relaunched from scratch now, given the size, quality, location and features etc it could easily sell off at 15000 psf. So in that context, consider the secondary market slowly but surely moving towards that point as earlier buyers sell to new buyers.
Rentals also must inevitably rise. Look at the crap you get on HK island for 30-40K per month. Absolute rubbish compared to Park Island. People might view living out of central as an "inconvenience" but as those of us on Park Island already know, its actually something many would pay extra for to have the peace and quite of living there. In any other country PI would trade at a premium for its exclusivity, rather than at a discount as is the case right now.
Finally, If you look at the big picture, I think its clear private cars will be allowed at least for owners, eventually. Now the big question is when, and I would think it would be not before 2018 the it would even be announced. Then a few more years to build car parking etc. May they remove that entire Noah's Ark Boat and build it there. If or when this happens prices would literally probably double as the demand would shoot up. So an investor now, needs to consider, do I buy and sell for a 10 or 20% gain in a few years, or hold with a longer term view for a really quite huge gain if we get the cars allowed. HK is full of stories of people who did make fortunes, seeking the opportunities in a smart way and being patient.
There could well be new price records set on Park Island but remember it might just be one of the special apartments such as the penthouse of the new phase 6 Ana Capri that sells. Those sell for way more, so would push up the overall price average.
ReplyDeleteI visited with my partner last week and we were seriously suprised and impressed. We originally came to see the beach, whcih was nice, but the estate on Park Island itself is really nice. Why is this place not better known in HK? Prices from what the agents are advertising seem very reasonable compared to other parts of HK. Does anyone know if these properties are freehold or leashold?
ReplyDeleteNews just out both Park Island property and HK property prices hit a record today.
ReplyDeleteYep confirmed by Centaline data today. And I am sure they will keep going up. Limited supply and more demand as people buy back in. I can't see any new supply coming to Park Island for a long time, so this will also drive the prices up there. I spend 50% of my time in HK and the rest in the US so I might well buy on Park Island as I am a qualified resident.
ReplyDeleteMark I am one of the ones who is not happy to see prices rising again, as I have been dilligently waiting for the prices to fall. Admitedly not on this blog but in the media generally a price fall was predicted. Now I will likely take the plunge as my suspicion that prices will keep rising seems was right all along. I am confident about Park Island and can't wait to actually move there. Right now living in a tiny place in Sheung Wan, whcih would sell for more than a 2 brm place in Park Island, the only benefit of whcih is convienient location.
ReplyDeleteCan someone provide me the Facebook page for Park Island please?
ReplyDeletehttps://www.facebook.com/groups/MaWan/
ReplyDeleteRegarding HK Property prices I would be inclined to either buy or sell right now as the Government will keep the market stable Yes there is demand but interest rate rises are also coming sooner or later so all combined I see prices as beeing just stable in the forseeable future. Of course, if you have a place you really like and plan to live in it long term then buying also always a good thing as paying rent is just dead money.
ReplyDeleteI don't think prices in HK can be tamed. There are a Billion Chinese who want to get out and aspire to HK. HK is still attracting expats in droves. But ultimately its a matter of supply and demand. Demand for living, property, and pace in HK is very strong. More want to come in than want to leave. So despite all our complaining about prices, we like it here. I think the property market in HK will keep going up for next few years at least if not longer.
ReplyDeleteITS NOT A BILLION CHINESE THAT CAN AFFORD TO COME TO HK BUT YOUR POINT ABOUT DEMAND IS TRUE. ALSO CAN YOU IMAGINE HOW POPULAR WILL IT BECOME ON PARK ISLAND WHEN THEY FINISH DOING THE BEACH EXTENSION PROJECT. IT WILL BE VERY ATTRACTIVE FOR ANYONE TO LIVE HERE.
DeleteHope they really do this. And then last of all add the approval for parking for our cars. And prices will x2 up:)
DeleteWe are a Kiwi family from NZ looking to move to HK end of year. Are there any NZ expats living in HK who we can get a little more info about living in HK from? Park Island looks like the sort of place suitable for us.
ReplyDeleteHi Brenda. Dont know if you made the move...If you still need any help, just yell out :)
DeletePrices in hk just hit a new high today! Park island also now at record prices.
ReplyDeleteTo the person who posted "what will happen to property prices if the Nxxxxrs from Africa come over and spread Ebola", I have deleted your post as it is likely to be offensive to some readers. However, I do believe HK is quite well prepared for disease outbreak after SARS, and if there is anything that a crisis like SARS shows it is that crisis creates opportunity.
ReplyDeletehttp://parkislandhongkong.blogspot.sg/2012/09/ma-wans-tung-wan-beach-to-be-extended.html
ReplyDeleteThe prediction of $10k psf is saleable area not gross. In gross term, Park Island is still around $7k psf, cheaper than YohoTown in Yuen Long or Sheung Shui Centre, (see Centaline price chart above) an old development with little or no facilities. Park Island is still very cheap despite the recent bounce. The long term potential has been well discussed in this blog-site, so time is the element for its full potential to be realised. For those considering cramped Central district, you can do a lot worse than considering Park Island - at these prices.
ReplyDeleteSome recent record land sales around Tuen Mun also really seem to confirm that the location is all going to boom once they finish the Macau to Zuhai bridge (estimated 2016 I believe).
ReplyDeletePRICES JUST HIT ANOTHER RECORD AND MANY BUYERS ARE COMING BACK. CAN YOU DO AN ARTICLE ON IT???
ReplyDeleteI am a very experienced investor. I reckon prices might hit a sharp peak mid 0f 2016 up 25% from now followed by a sharp correction of the same amount later in the year. Now is ok to buy but either sell in a year or be prepared to hold for a bit of a dip.
ReplyDeleteLol at anyone who claimed the market has peaked :)
ReplyDelete