Wednesday, June 13, 2012

HK developer plans on selling more homes

Hong Kong’s fourth largest developer Henderson Land will increase its sale of residential units, as home prices in the city-state have fallen this year.

“Every developer is rushing to sell homes right now,” said Lee Shau-kee, the billionaire Chairman of Henderson Land. “Right now demand still outweighs supply so prices will probably remain stable. But when more new units start coming into the market in the future, then it's hard to say.”

Hong Kong's Chief Executive-elect Leung Chun-ying, who will assume office on 1 July, pledged to help low-income households, address ‘deep-rooted conflicts’ in the community and increase housing supply. The government forecasted slow growth of between one and three percent for the whole of 2012, as the Eurozone debt crisis continues to threaten the financial and trade services sector.

Raymond Ngai, an analyst from Bank of America Corp's Merrill Lynch & Co unit, said prices of residential units in Hong Kong gained eight percent so far this year and are expected to fluctuate slightly for the rest of 2012, underpinned by concerns over the impact of the European debt issues on Hong Kong’s economy.

He said he prefers to invest in developers’ shares rather than property stocks since the increase in housing supply will curb rising prices.

“I'm not just saying these things for self-interest as my company's also trying to sell apartments,” he said. “But there really is a big discount in developer share prices to their assets. When the economy recovers, you can expect a very handsome return on your investment in stocks.”

The number of housing transactions in the city-state dropped 14 percent this month, based on new statistics released by the Land Registry. Data showed that value of those transactions plunged 4.2 percent to HK$47.4 billion (S$7.82 billion).

View the original article here

Source From Property Guru

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