Hong Kong property market to remain resilient even in the midst of exodus, Reda chief Keith Kerr says
- Positive uptrend in the property market to continue for the rest of the year, barring any unforeseen circumstances, says Keith Kerr, president of Reda
- Property prices, which have increased 3.1 per cent so far this year, could clock gains of between 5 and 10 per cent for the full year, JLL’s Joseph Tsang says
Hong Kong is unlikely to see a significant impact on housing demand from the growing emigration wave, according to the president of the Real Estate Developers Association of Hong Kong (Reda), joining a chorus of market observers who expect prices to continue rising this year.
“I know some people are leaving, but some people are moving here to Hong Kong,” said Keith Kerr, president of Reda and a former chairman and chief executive at Swire Properties. “For every person moving out, there’s probably at least the same number, if not more people coming in, so I don’t think that really is going to affect demand in the medium to longer term.”
“The economy is picking up, stock market is active, and I think the demand for residential accommodation will remain strong,” he added.
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In fact, sentiment in Hong Kong’s property market has improved over the past few months amid a brightening economic outlook, falling unemployment rate as the coronavirus pandemic in the city has largely been brought under control.
With residential property prices having already risen 3.1 per cent so far this year, according to data from the Rating and Valuation Department, property consultants expect prices to rise further.
“If we can control the Covid-19 situation, the full-year increase will be between 5 and 10 per cent,” said Joseph Tsang, chairman of JLL in Hong Kong.
Centaline Group and Ricacorp Properties, two of the city’s biggest property agencies, also expect home prices to rise to new highs as the current levels are marginally below the peak in 2019.
Separately, Kerr’s TDS on Monday announced the pricing of its 42 Tung St. residential project, near Central. The 23-storey building, comprising only 13 apartments – nine simplex and four duplex units, will be ready in September next year.
The company said it would sell eight simplex units of 585 sq ft each at prices ranging from HK$19.24 million (US$2.48 million) to HK$22.75 million, or HK$32,889 to HK$38,889 per square foot after discounts.
TDS plans to sell the four duplex units measuring 1,157 sq ft and a 346 sq ft simplex unit by tender from August 1.
JLL’s Tsang said that Swire Properties sold homes in its nearby Eight Star Street project at about $40,000 psf, with some fetching as much as HK$50,000 psf.
Kerr’s first residential development project with TDS was 28 Aberdeen St. in Sheung Wan in 2017. He said that project gave the firm the experience to deal with the complexities of undertaking a project like 42 Tung St. on a small site. Its difficulty was “not in the building process”, but regulatory issues and securing approvals for matters such as traffic flow.
“Real estate development in Hong Kong is a complicated business, especially in the urban areas, so it did take time to get a few issues resolved,” Kerr said. “But now we’re [already building] the 15th floor, so we’re well under construction for completion next year.”