PCPD forecasts 30% rise in luxury property prices
Updated: 2009-06-12 07:15
By George Ng(HK Edition)
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HONG KONG: High-end property developer Pacific Century Premium Development Ltd (PCPD) offered a bullish outlook on the luxury housing market by forecasting price rises of up to 30 percent this year amid tight supply and low interest rates.
However, market watchers are more conservative in their own forecasts, although they agree that there is room for price increases in the luxury housing sector due to inflation expectations.
"The property market will likely continue to fare well in the second half amid low interest rates and tight supply," PCPD chief executive Robert Lee told reporters after the developer's annual general meeting yesterday.
The selling prices of flats in 35 benchmark luxury housing estates climbed an average 4.4 percent month-on-month to HK$13,283 per square foot in May, the biggest monthly rise this year, according to latest data by property agency Ricacorp Properties Ltd.
The average price for luxury housing units has surged 18.5 percent from a low of HK$11,213 per square foot at the end of last year, Ricacorp notes.
Lee noted that the absence of large-scale projects being launched in the past 18 months has helped boost demand.
As a result, Lee forecasts a 20 percent to 30 percent rise in prices in the second half of the year.
"That's a rather optimistic estimate," said Marco Mak, a property analyst and head of research at Taifook Securities Ltd, although he remains positive on the sector's prospect.
"The luxury housing segment has relatively low correlation with economic conditions. It has much to do with the supply," he said.
"With limited supply and stable demand in the market, prices of luxury houses will be well supported."
Jasper Tsang, research director at CSC Securities (HK) Ltd, is also conservatively optimistic about the luxury sector, forecasting a moderate average price rise of around 5 to 10 percent in the second half.
"The strong liquidity in the market and the low interest rates will help boost demand for luxury properties," he said.
(HK Edition 06/12/2009 page3)