Hong Kong property buyers bide their time

[FT News]

Agents say a large number of people in the territory want to buy, but not now, as investors wait for prices to fall even further from their peak last year.

Property prices are crashing in property-obsessed Hong Kong and that is causing plenty of fear. But for Kevin Tse it represents an opportunity to impress the family and, he believes, wisely time his entry into the market.

“My mum and my wife’s mum are pushing me to buy,” the 32-year-old says. But he adds: “I’ll start looking in the second half [of the year] when prices will be even lower”.

Property agents say a large number of people in Hong Kong are in a similar mood. They want to buy, but not now.

Developers have cut prices aggressively and lending rates are at the lowest level since 2004, when the self-governing Chinese territory was recovering from the outbreak of severe acute respiratory syndrome.

But the measures are yet to have an affect. “It’s very quiet out there,” says Victoria Allan, managing director of Habitat Property, an agency that focuses on expensive homes on Hong Kong’s main island.

“People are looking to buy, but they are just looking. They are waiting for prices to fall 30-40 per cent from their peak last year.”

Property prices have so far fallen about a quarter from their peak last spring, and are expected to drop another 20 to 25 per cent this year amid stock market uncertainty, rising unemployment and sinking investor confidence.

The drop in home prices is being felt acutely. Property is a mainstay of the territory’s economy, the stuff of daily conversation and a central topic for newspapers and magazines.

For many families, housing represents the biggest form of savings, both as homes and investments, while mortgage loans and advances for property development are big business for the banking sector. Speculating on the property market has also long been a favoured sport for Hong Kong investors.

More...

Can Americans buy there and have full ownership?