'My flat has already gone up by 10%, so if prices drop I am OK'

HONG KONG: C L Kong says he is unfazed by the government's latest round of measures aimed at cooling down Hong Kong's red-hot property market.

The public relations executive signed a preliminary agreement to buy a two-bedroom flat in Tseung Kwan O in May with the formal contract due to be completed by the end of this month.

Kong said he would complete the deal and was not thinking of selling in the short term.

"I need somewhere to live," he said.

Rising rents and strong demand have also bolstered confidence in the property market.

"Demand for flats remains very strong. A lot of home seekers visited the estate where I currently live over the weekend," Kong said.

"I live in a similar apartment to the one I am buying, which costs me HK$8,000 (RM3,255.95) a month. The lease will be up soon and I expect the rent will be raised to HK$9,000 or HK$10,000," Kong said.

He added that the amount he was now paying in rent every month was similar to the mortgage he is taking out.

In the short term, he believes prices may see a modest correction because of the new measures.

"The price of the flat I have bought has already gone up 10%, so even if home prices drop 5% to 10%, I am still OK," he said.

Property owner Sandra Liu is even more optimistic. She bought a two-bedroom flat in City One Sha Tin for about HK$2.5 million in May. At today's market prices it would fetch about HK$3 million, but she has no intention of selling it right now.

"Analysts expect the stock market will see a rebound by the end of this year. History shows that property prices will rise after a surge of the stock market. I will wait until the end of this year," Liu said.

Patrick Chow Moon-kit, head of research at Ricacorp Properties, said Kong and Liu were typical of many optimistic buyers and sellers in town.

"They do not expect the measures will deal a blow to the market," Chow said. "Buyers hope to take this opportunity to pick up a bargain, but sellers do not want to cut prices substantially."

His agency's data showed that there were 436 preliminary sales and purchase agreements signed during the week from August 9 to August 15, down 14% on the previous week. He expects a further decline of 10% in sales volume in the secondary market this week.

But not all investors are sitting tight. Kelvin Li, sales manager at Hong Kong Property Services (Agency), cited a case of an investor selling a flat in City One Sha Tin for HK$1.9 million, HK$100,000 below his previous asking price.

Another investor agreed to cut the asking prices of three flats by as much as 10% but has not yet attracted buyers, Li said. — South China Morning Post