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Dec News Article

With Risk comes Opportunity…!

Whilst the talk of the town at the moment is the continued uncertainty surrounding European and World markets, tighter credit conditions in Mainland China, further interest rate increases in Hong Kong and the adoption of a wait and see attitude. As we head into the festive period, here at Hong Kong Realty we are more optimistic about the future of the market.
Certainly the rental demand for our investment properties has not dwindled as there simply is very little stock on the ground and certainly not of the quality that we offer. The demand-supply imbalance is likely to continue in the short-medium term. Couple this with the fact that more and more of our expatriate clients are deciding to stay in Hong Kong beyond the normal transient “2 year watershed”, as Hong Kong is without question positioned better than the majority of other developed markets. And as a result of these uncertain times in other asset classes, people who are “sitting on cash” are looking at property from an end-user perspective and as a chance to position themselves favourably on the property ladder as the “balance of power” seems to be switching towards the buyer.
Fundamentally, interest rates in Hong Kong at present are still very low when judged historically. Put simply, mortgage rates are starting to reflect back to what they were before at an average of 3% to 4% over the past decade. And people in Hong Kong can afford their debt especially considering the LTV ratios on offer. Moreover, inflationary pressure continues to keep rentals in the positive territory, certainly at least with small to medium sized landlords.

Dec. 18, 2011

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