Where to now for Hong Kong property?

Where to now for Hong Kong property?
23 January 2011

DURING 2010, property prices in Hong Kong soared, recording a 34% increase, but what does 2011 hold for property investors in the Asian powerhouse?

The luxury residential market performed particularly well last year, with prices rising by 40%. In response to this enormous price growth, the Hong Kong government implemented several measures in an attempt to deter speculation and cool the market.

These regulations have had a short-term effect with transactions volumes falling 26% in December.

However, strong economic fundamentals, low interest rates and a sever undersupply are expected to continue to drive up property prices in 2011.

The Hong Kong economy recorded a 6.6% growth rate last year and was recently voted the world’s freest economy for the 17th consecutive year.

It is no wonder that Hong Kong is one of the world’s top investment destinations, receiving the second highest level of foreign investment in Asia after China.

As one of the preferred investment classes among high net worth individuals, property remains attractive as an investment hedge with low mortgage rates in areas like Hong Kong continuing to provide positive yields against the cost of finance.

Although the Hong Kong government is poised to implement further measures, property prices are nevertheless expected to increase in 2011.

Supported by easy and affordable access to financing, limited supply and strong market fundamentals, the Hong Kong property market is expected to continue along its rapid growth path over the long-term.

Pic credit: Arvind Balaraman/ FreeDigitalPhotos.net

Where in the world do you think will yield the biggest returns for property investors during 2011? Tell cashy by commenting below!


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