Hong Kong luxury residential sector leads property recovery cycle

PETALING JAYA: Hong Kong’s luxury residential sector led the property recovery cycle in the first 11 months this year, with the price growth of 40%, executive director of residential sales of Colliers International Hong Kong Ricky Poon said.

The total value and number of transactions with prices over HK$10 million (RM4.4 million) increased 8.8% year-on-year (y-o-y) to HK$38,837 million and 44% y-o-y to 1,231 cases respectively, during the period from January to November 2009, he said.

“The luxury residential market has seen active sales in 2009, with record-breaking prices achieved for new projects. Prospective purchasers were mainly buyers coming from China, which took up 40% of the total, followed evenly by upgraders, expatriates, industrialists and investors.

“With limited new supply, low interest rate and capital inflow projected in 2010, luxury residential prices are expected to see a rise of 10% in the next 12 months,” he added.

Colliers International, meanwhile, said the recovery of the residential leasing market lagged behind the sales market, with rentals yet to return to pre-crisis levels. The leasing sector experienced a year-to-date fall of 5%.

However, tenants from the finance industries are returning as the economy sees improvement. The luxury residential rentals are projected to pick up steadily by 5% and the residential yield will be about 2.5% to 2.8% in the next 12 months.