What will Hong Kong Property Prices do in 2015?
Well, if we could accurately predict the future we of course would all be retired millionaires by now. But I think a very basic question Hong Kong property investors have to be asking themselves is what is the outlook for Hong Kong property prices in 2015.
On the one hand we have strong demand for property, and very low interest rates. On the other hand we have cooling measures in place, the possibility of interest rates rising, and among other things, political unrest in Hong Kong due to the Occupy Central movement, and the desire of many Hong Kong citizens for true democracy.
If I had to make a guess I would think that overall, prices will keep rising in 2015 in Hong Kong. I can't see interest rates rising at all until late 2015, and even then they will rise only very very slightly, if at all. Property cooling measures are very unlikely to be increased, and they are more and more being "priced in" which means that eventually, when they are removed, the removal of property cooling measures in Hong Kong will be very supportive of property prices. Indeed if removed too rapidly it may lead to a massive spike in prices. They will likely be removed very slowly and steadily (lock step with US interest rate increases), leading to stable price appreciation (which despite the political bantering about "affordable housing", is well recognized by the powers that be as being good for Hong Kong). Further, as the global economy recovers, Hong Kong stands to benefit strongly, due to its unique symbiotic financial relationship with China (which in turn is the "factory of the world".
All in all, the factors going forward, weighed up, point to quite decent property price growth for Hong Kong next year.
I also received numerous emails over the last week noting that Park Island property prices had hit a record high this week (and some thanking me for inspiring them to buy an apartment on Park Island).
Here is the graph from the Centadata Hong Kong property index (for Park Island):
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| Centadata HK property index graph for Park Island |
Property prices for Park Island have indeed hit a new peak. There was a dip as the brunt of cooling measures hit, and now a quick recovery of the trend in place since 2009 as investors began to buy back in.
I thought it would be interesting to take a chartist approach to looking at where property prices might go based on historical trends:
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| Property price trend forecast for next 3 years for Park Island, Ma Wan, Hong Kong |
Like always, don't rely just on my views, but do take consideration of the trend and make up your own mind. If this convinces you that its the right time buy, hold, or sell property, then great :)
Very helpful blog. We r one of those people about to buy at record prices. Wish me luck!!!!
ReplyDeleteI agree will keep going up this year. Just too much pent up demand for adorable quality housing in HK. Crazy place HK is ...
ReplyDeleteCan someone recommend a good agent please? I am looking at a smaller size apartment for investment. The route to Mongkok would work well for me as I like that area for shopping.
ReplyDeleteFrom a living perspective Park Island is highly recommended and rentals very decent value. From a buying perspective I am not so sure. Interest rates will rise at some point and lets see what happens then. Will it be next year or the year after knowonw knows but it will happen.
ReplyDeleteWell u could also draw that graph from the bottom price of 2003 to the bottom of the low period in early 2014. Yes it would still point upwards in the trendline but not as sharply as your trendlines indicate.
ReplyDeleteHSBC property valuations for Park Island are also up.
ReplyDeleteHK property prices may be crazy but it is still attractive for Mainlanders as a destination for quality, security and a gateway to exit. I agree with the points made in the article but the underlying support from Mainlanders should give comfort to those wishing to buy or maybe change the perspective a bit for those whishing to sell trying to spot a peak in house prices. .
ReplyDeleteI am certain prices will rise in the long term but when and how much is anyones guess.
ReplyDeletePark Island has 3 bedroom places with ocean views for under $10m. Not many parts of HK can you get that kind of value and quality for that price. So I agree prices will move up. The thing is many HK people are not yet aware of Park Island or maybe they heard of it but never consider moving there yet. That will change over time I am sure.
ReplyDeleteIt won't be long before nowhere in HK will you get 3brm with ocean views for under 10M.
DeleteIs there anywhere even now???
DeleteLook at the CCI property index today. Up again. Upward trend intact.
ReplyDeleteLook at the CCI property index today. Up again. Upward trend intact.
ReplyDeleteYOU CANNOT DEFEAT MARKET FORCES. AS LONG AS DEMAND OUTSTRIPS SUPPLY PRICES WILL KEEP GOING UP. SO ASK YOURSELF, ARE THERE GOING TO BE PEOPLE PREPARED TO PAY MORE OR LESS TO LIVE ON PARK ISLAND INTHE FUTURE. I THINK YOU CAN SEE THE ANSWER. RENTS ARE ALREADY RISING.
ReplyDeleteHi all, I'm an agent on the island and there is definitely a renewed interest in people wanting to buy apartments on Park Island since the last few months. Rental has always been strong and prices stably rising.
ReplyDeleteThe buyer interest is because for the price range and budget there is nothing compares to park island for the value you get. Its a very good apartment to buy as investment and more overseas expats seem to be buying. It will be like a Discovery Bay in the future as early local owners sell up to higher prices paid by foreigners.
No need to worry about occupy central. The Hong Kong police are on the side of the Hong Kong people. They will play the game with China but they will turn and protect us in HK if they really need to. Remember they are HK people with HK children and HK family. Hong Kong will be fine if we stay strong.
ReplyDeleteNot everyone would like prices to rise. I am an owner and yes of course I think prices will keep rising over the long run, but I didn't more to Park Island solely to make money, rather for the pleasure of living here and the atmosphere and harmony we have. As PI gets more popular and better known those dynamics might change. We might get more richer or snotty types or more mainland chinese with money. That might make it more expensive but it will be not nicer overall despite the profits we stand to make.
ReplyDeleteI live in New York and noticed this blog and reviews about Park island. Indeed it is a pleasant place to live. Will look into Park Island when I move to HK soon.
ReplyDeleteAny idea how the political unrest will effect property prices in HK? Surely it must be negative for property prices although I understand non of the occupy movement or violence is anywhere near Park Island, so possibly its even a safehaven so to speak? I am a soon to be exchange student at HKU and am considering living on Park Island.
ReplyDeletelook at http://en.homeprice.com.hk/. Prices are definitely on the up and the political unrest in HK seems to be effecting them
ReplyDeleteThe price trend u protected is intact 4 months later. U should do regular updates.
ReplyDeletestupid occupy protests will try to ruin HK property market but will not succeed. Property price will keep going up in HK.
ReplyDeleteThe big 'ParknShop' is becoming a 'Fusion' as well. Ready in February. We saw the recent opening of 759 as well a few weeks ago. The 'Fusion' will definitely impact property prices. People coming to visit flat in the week-ends will start to compare Park Island to Discovery Bay now as more luxury shops open.
ReplyDeleteCHINA IS EASING BANK RATES. THIS WILL ONLY LEAD TO MORE MONEY FLOWING INTO HK AND WHILST MAINLANDERS DONT KNOW MUCH ABOUT PARK ISLAND THEY WILL DO SOON SO IF YOU WANT TO PROFIT THEN BUY NOW AND SELL TO THEM IN A YEARS TIME.
ReplyDeleteOne thing to bear in mind. Prices of property are increasing not just in HK but globally thanks to global monetary easing. If u sell you are out of the market and will lose out to inflation. Look around at the big picture.
ReplyDeleteOne reason why you shd not sell now is that you are giving up a big amount to the Govt in stamp duty. Lets say the cooling measures overall are costing you 10% of what you shd be getting. On a $6m sale that would be 600K you are giving up. And on top of that look at how tight bank loans are right now. You can't really borrow more than 50% and that means buyers can't pay top dollar. When rates go back to normal they will reduce the stamp duty and the banks will lend more. So you will get a lot more if you sell in the future than now and it will cost a lot more to buy in the future too. Also there is only so much land and space that can realistically be built on in HK. Its not like some places where there is infintate space to expand. HK is inherently limited in space and so supply cannot easily be increased despite what u hear politicians propose from time to time.
ReplyDeleteMarket went up and up lately and now more china stimulus and easing will lead to more money flow to HK property for investment. This will keep making HK property go up next year too.
ReplyDeleteWell HK prices hit another high this weekend according to SCMP and the CCI index. HSBC bank valuations for park island are also up this weekend.
ReplyDeleteGood discussion here and good website for Park Island. I would say HK property is in tight demand. We all need somewhere to live, its crowded place and space is tight. Hkers are buying tying micro apartments, such is their desire for property and every mainlander it seems also wants to invest in HK. Now, the biggest advantage I can see for Park Island is if you look at the stamp duties payable on HK property you will see the duty goes up according to value. http://www.gov.hk/en/residents/taxes/stamp/stamp_duty_rates.htm.
ReplyDeleteSo, if you are going to spend lets say 6m on an apartment and therefore pay 6% stamp duty (600K), are you going to invest in a little box in Mid Levels, or are you going to buy where you get more bang for your buck and a decent size place? Of course you go for the better value and if you look at Park Island or similar estates away from central of this quality Park Island really is good value. So I think you will see prices continue to catch up in Park Island.
Park Island prices at 10K psf by end of 2014. Didn't you or someone predict that Mr blogger? Might still get there with a late spurt lets see.
ReplyDeleteAnon, yes I did indeed make a prediction for Park Island prices at year end 2014. See here: http://parkislandhongkong.blogspot.sg/2014/07/centa-city-hong-kong-property-index.html.
ReplyDeleteHSBC just raised its valuations for Park Island putting up prices around 1% I think.
ReplyDeleteThe route to wealth in HK is definately property. Timing is key though. Property will go up over time but best time to buy is at bottom of a cycle. Are we at the start of a new cycle now?
ReplyDeleteMarket will keep rise. See how strong weekend sales were for new launches in NT such as in Tung Chung. The Century Link properties were snapped up with huge demand and are now selling up more then 5% on the secondary market already. These are now all over $12,200 psf. The market is starting to get its confidence back now,
ReplyDeleteSo far it seems market keeps going up. No more can be build on Park Island and more and more want to live there. Unless they develop the other side of the island where the old villiage is?
ReplyDeleteWe are in an era of low interest rates in a world awash with money.That money needs to find a home. If you are out of assets your money is rapidly losing value so that is why more and more people are putting their money into hard assets. Property in HK is limited, space is limited and people need somewhere to live. So that's why people are investing in property and also reluctant to sell off anything they have.
ReplyDeleteTo the last poster, your comment was removed. I am OK with comments about China property buyers in HK, but not if they are overly offensive or racist.
ReplyDeleteJust revisting this post. You were right on the mark Park Island blogger. Thanks for the valuable advice you have here.
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