Tsang has grown skeptical about Hong Kong’s real estate future considering the rise in vacancies in the past years. He’s issued a warning but that won’t deter some very wealthy buyers from paying high prices according to The New York Times. The report states, “…One of Hong Kong’s largest developers announced Wednesday that it had sold an apartment for 439 million Hong Kong dollars, setting a record, just hours after the city’s chief executive warned that the city might be facing a real estate bubble.
“The deal, valued at the equivalent of $56.6 million, set a record price per square foot for Hong Kong, and the developer, Henderson Land, said it was not aware of a higher figure’s having been paid anywhere else.
“Henderson Land said that the apartment on Hong Kong Island, near the top of a skyscraper overlooking Victoria Harbor, was a two-story unit with five bedroom suites. It measures 572 square meters, or 6,157 square feet, and has a garden of 340 square feet, for a price per square foot of 71,289 Hong Kong dollars, including the garden. That measurement includes common areas like elevator lobbies that are partially allocated to individual units.”
Here’s what we think:
First, buyer activity in Asia isn’t as lethargic as in North America. The Chinese economy may be affected by the slowing demand for their products (and recalls if we must mention) but that doesn’t put a lot of investors in real estate out of the buying spree. They can and they will buy if they want to, regardless of what the future holds.
Second, if they’re planning to commit existing vacancies to commercial real estate, they might have to prop up their economy against rising U.S. interest rates. If mortgage loans will be the first hit, it should be clear by then this Chinese territory needs supporting income streams to hurdle the impending crisis.
Andy Denton is the COO of www.Realty.com. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com.
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