The WPJ
Hong Kong Still World's Hottest Market

Hong Kong Still World's Hottest Market

Residential News » Asia Pacific Residential News Edition | By Kevin Brass | March 18, 2013 8:15 AM ET



Government measures implemented to slow soaring home prices in Hong Kong didn't work in 2012. Home values rose 23.6 percent for the year, the largest increase in the world, according to the Knight Frank Global House Index released today.

Hong-Kong-Central-Business-District.jpg "With supply lagging, demand from mainland Chinese investors keen to get their slice of Hong Kong's real estate prices, has surged," the property firm reports.

Overall prices in Asia Pacific increased by 6.7 percent in 2012, compared to a worldwide average of 4.3 percent, a result dragged down by "continuing challenges" in Europe. Greece posted the largest decline in the index, with prices falling 13.2 percent in 2012.

Other European markets showed signs of life. Turkey, Russia and Austria all posted gains of more than 10 percent. The best performing region was South America, where prices rose by an average of 8.4 percent.

knight-frank-global-performances-unweighted-average-global-house-price-change.jpg Of the global markets, Dubai was the index's second best performer, reporting gains of 19 percent.

"For several years the 'yo-yo' of the rankings, the Dubai market is finding its feet," the report concludes. "Stalled developments are being resurrected, sales volumes are rising and the level of market transparency is improving."

Unlike Dubai, Hong Kong prices have been rising steadily, despite the economic conditions around the world. Government restrictions on lending and new taxes, implemented out of concern about the market overheating, have apparently done little to prevent the price escalations, according to Knight Frank's data. 

However, a new round of regulations, including an increase in the stamp duty on luxury homes, may finally have an impact, the property consultancy says. Sales of properties priced above HK$2 million now require a stamp duty up to 8.5 percent of the value of the property, more than double the previous tax.

knight-frank-regional-analysis-unweighted-average-house-price-change-by-world-region-2011-2012.jpg "If the Hong Kong Government's latest efforts to increase stamp duty is a measure of their determination to cool price growth we can expect a return to more muted growth in 2013," Knight Frank says.

Knight Frank is generally cautious in its predictions for 2013.

"2013 looks unlikely to deviate significantly from 2012's script," Knight Frank predicts. "The performance of the world's mainstream housing markets will depend on finding some economic stimulus, relaxing lending criteria and instilling buyer confidence. Europe presents the main downside risk acting as a brake on global growth."





Real Estate Listings Showcase

This website uses cookies to improve user experience. By using our website you consent in accordance with our Cookie Policy. Read More