HONG KONG: Hong Kong’s monthly Center-City Index of property deals rose 61 percent from 63 in 1994 to 102 in 1997.
After the Asian financial crisis, it plunged 68 percent to a low of 32 at the height of SARS in 2003. But since then its rise has been relentless amid supply woes and worldwide quantitative easing.
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It stands at 140 now, with cumulative gains since 2003 standing at 337 percent.
That is despite the introduction of successive stamp duties, with some saying the index would have hit 200 42 percent upside from the current level had it not been for them.
Don’t be too bearish if you believe the factors affecting the property market limited supply, low interest rates and global credit loosening won’t change in the short run.
Shenzhen’s property frenzy is even scarier. Since the easing of property policies on March 30, secondary market prices have risen 40 percent.
To clear inventory developers bought 33 percent less land from January to April, while new starts fell 17 percent.
Property agency Hopefluent (0733), with a Guangdong focus, should be a beneficiary.
Its share price is trading at 10 times historical earnings. Dr Check and/or The Standard bear no responsibility for decisions made based on this column.
