Hong Kong First-Quarter Home Prices Rise 5.5%

SpringMountain

March 31 (Bloomberg) -- Home prices in Hong Kong, where luxury residences are Asia’s second-most expensive, rose 5.5 percent in the first quarter from the end of 2008, according to a report by Centaline Property Agency Ltd.

Lower mortgage rates and an average price decline of 20 percent from the same period last year lured buyers, Wong Leung- sing, an associate director, said in a phone interview yesterday. Still, it is too early to say that the property market has recovered, he said.

Hong Kong billionaire Li Ka-shing said last week that Cheung Kong (Holdings) Ltd., his property flagship, no longer needs to line up banks to lend as the mortgage market is “much better.” The value of new mortgages in the city, in its first recession since 2003, fell for the seventh month in February.

“The rebound just means that the first wave of declines may have ended,” Centaline’s Wong said. “It doesn’t mean that prices won’t drop further. If, for instance, another big bank fails, that would hurt prices. Of course if there is more good news, values may continue to rise.”

Of the 10 biggest housing estates tracked by Centaline, prices at Taikoo Shing in the eastern part of Hong Kong island rose the most. Prices jumped 9.9 percent to an average of HK$6,017 ($776) a square foot as of March 22, from HK$5,473 on Dec. 28, the real estate agent said in a report yesterday.

Mei Foo, located in Kowloon, ranked No. 2 after posting a 9.6 percent-gain in average prices to HK$3,394 a square foot during the period, according to the report.

Outperforming Luxury Homes

The gain in these residential projects, considered as part of the mass market housing, outperformed the 2.1 percent rise in luxury homes, or those worth at least HK$10 million, according to Centaline data.

Ricacorp Properties Ltd., a rival real estate agent, yesterday also said a “mortgage battle” between banks drew home buyers. The number of transactions rose to 420 in the week ended March 29, the highest in 43 weeks, it said in a report. The figures exclude new apartments.

Hong Kong banks are lowering mortgage rates as competition heats up, Peter Wong, an executive director at the local unit of HSBC Holdings Plc, said this month.

HSBC, Hong Kong’s biggest home-loan lender, offered fixed mortgage rates to borrowers for the first couple of years, the South China Morning Post reported this month. Hang Seng Bank Ltd., 62 percent owned by HSBC, is offering three-month interest-free mortgages, the paper reported.

On a monthly basis, new home loans approved by Hong Kong banks rose for the fourth month in February to HK$11.4 billion, according to the Hong Kong Monetary Authority.

On an annual basis, the value of these new loans granted in February fell for the seventh straight month.

Hong Kong has the second-most-expensive luxury home prices in Asia, with an average price of $16,125 a square meter, after Tokyo, where prices are $17,998, according to the Global Property Guide Web site.

SpringMountain

Let's see how tomorrow's US home price data look like.

源济