Hong Kong at Risk of Property Price Correction, IMF Says – Bloomberg 12-11-12

Salient to Investors:

The IMF said:

  • the sharp run-up in house prices raises the risk of an abrupt decline.
  • the property sector is the main domestic economic risk, though the odds of a slump that has major economic and financial consequences is fairly low near term.
  • economic growth may rebound to 3 percent in 2013 versus 1.25 percent in 2012, while inflation may average 3.75 percent in 2012 and 3.5 percent in 2013.

Steven Barnett at the IMF said in the long run, it’s about increasing supply. Barnett said the dollar peg is still the best arrangement and is transparent and credible, and Hong Kong has flexible markets, robust and proactive financial oversight, and a very healthy fiscal position.

Read the full article at http://www.bloomberg.com/news/2012-12-12/hong-kong-at-risk-of-property-price-correction-imf-says.html

Hong Kong Parking Costs $387,000 as Cash Moves From Homes – Bloomberg 11-26-12

Salient to Investors:

Investors reacting to government curbs on home buying are shifting money into parking spaces. The average price of a previously owned parking spot in residential complexes rose in Q3 to the second highest on record. Hong Kong has one of the lowest car ownership rates among developed countries, with 56 cars per 1,000 people versus 439 in the US and 101 in Singapore.

Simon Lo at Colliers Intl said there’s just too much liquidity in the market.

Savills said Hong Kong is the priciest place to buy a home out of 10 major cities, including New York and London.

Kenneth Tsin at Bank of East Asia said Hong Kong banks normally lend a maximum 50 percent of a parking space’s value, versus 70 percent for residential properties. Tsin said parking spaces are less marketable than flats and shops, and their values are less resilient.

IHS Automotive said luxury cars accounted for 47 percent of total private-car sales in Hong Kong during the first 10 months of 2012

Midland Holdings said parking space transactions in Hong Kong in the first 10 months of 2012 accounted for 8.9 percent of all property deals, and the highest since records began in 1997. Buggle Lau at Midland said the taxes have driven investors away from buying apartments.

Read the full article at http://www.bloomberg.com/news/2012-11-26/hong-kong-parking-costs-387-000-as-cash-moves-from-homes.html

Hong Kong Recession Risk Is Global Warning, Most Accurate Forecaster Says – Bloomberg 08-15-11

Salient to Investors:

Kevin Lai at Daiwa Capital Markets said:

  • Hong Kong’s export-led economy, a barometer of global growth, is sinking into a recession that is likely to last for at least a year.
  • Global demand is weak so the US and Europe will see a sharp slowdown, or near-zero growth in 2012.
  • The Hong Long economy is the world’s most externally-driven so a slump there has grave implications.
  • The Hong Kong economy will contract 1 percent over the 12 months ending March 31.

Robert Zoellick at the World Bank said the world economy is entering a new danger zone.

Donna Kwok at HSBC welcomes a healthy dose of moderation for a hot Hong Kong economy, and until year-end sees expects the impact of softer western demand to be countered by continued resilient Asian domestic demand.

Read the full article at http://www.bloomberg.com/news/2011-08-15/hong-kong-to-enter-recession-forecaster.html