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Property Market Overview |
Location |
Area |
Population |
Language Religion | Currency/Money | Climate | International dialling code Electricity | History | Government | Economy | Visas Healthcare | Travel Due to Hong Kong's strong economy, its residential property
sector has long flourished, although several road bumps
have appeared along the way, the most notable being
the SARS outbreak in 2003 and the market crash of 1997. Although 2006 was less than stellar, Hong Kong's property market is expected to pick up in 2007 as all sectors of real estate recovered well by the fourth quarter of the year and some such as office and high-end residential recovered exceptionally well. It's an attractive time for investors looking to purchase luxury grade property to lease out, as rental rates are expected to rise by just under 10% and capital values could go up by as much as 20% during the year, buoyed by an increased number of wealthy locals and a growing number of international and Chinese companies that are establishing a presence there. This also makes it a prosperous time for luxury residential property owners, as a series of positive developments have provided a solid base for further increases in capital values. Many stock investors were preparing to maximize their portfolios by investing part of their gains into other fixed asset items such as houses and apartments in traditional luxury residential districts, in order to achieve more stable returns. Because of Hong Kong's sprawling residential make-up, it's difficult to define exactly which areas are the most popular in terms of high-end property, given that luxury developments exist just about everywhere. That said, there are several areas that are particularly attractive for all the usual reasons: accessibility, views and facilities. These areas include Island East, Happy Valley, The Peak, Hong Kong Island South (Stanley, Repulse Bay, Deep Water Bay), Wanchai and the Kowloon Peninsula - Kowloon Tong. The bar for luxury residential real estate in Hong Kong, already one of the most expensive areas in the world, was recently raised, placing The Peak at the height of the city's luxury market. Sitting 1,811 feet above sea level, this is the highest point on Hong Kong Island and has long been a hotspot for wealthy investors, dating as far back as the 19th century. It's a tourist attraction as well, offering spectacular, 360-degree views of all of the surrounding islands. In late 2006, The Peak became the site of the most expensive residential piece of land in the world. The government land auction of 12 Mount Kellett Road fetched HK$1.8 billion. Sun Hung Kai Properties paid a record HK$42,196 psf, 134 percent of the opening bid. Because the property market is set to keep rolling ahead, owners are now content to wait for higher bids for their luxury residential properties due to the overall upward adjustment in asking prices triggered by recent land sales. Many investors are reluctant to rent out their luxury houses or apartments since it would weaken their flexibility in selling the property. It must be noted that Hong Kong is not an easy market to enter, given that its high-end residential market is the third most expensive in the world, after London and Monaco. In addition, because all land belongs to the government; those who buy property actually buy an agreement or a lease. According to the laws governing the real estate sector theoretically anyone is entitled to own whether as an individual or through a company structure. Essential information Location Area Population Language Religion Currency/Money Climate International dialling code Occupied by the United Kingdom in 1841, Hong Kong was formally ceded by China the following year; various adjacent lands were added later in the 19th century. In accordance with an agreement signed by China and the UK in 1984, Hong Kong became the Hong Kong Special Administrative Region (SAR) of China in 1997. According to the agreement, China has promised that, under its "one country, two systems" formula, China's socialist economic system will not be imposed on Hong Kong and that Hong Kong will enjoy a high degree of autonomy in all matters except foreign and defense affairs for the next 50 years. Today Hong Kong is a world-class financial, trading and business centre. Hong Kong has no natural resources, except one of the finest deep-water ports in the world. A hardworking, adaptable and well-educated workforce of about 3.56 million, coupled with entrepreneurial flair, is the bedrock of Hong Kong's productivity and creativity. Prior to July 1, 1997, Hong Kong was a British dependent territory. A British-appointed governor, representing the British crown, headed the Hong Kong government and exercised authority over civil and military matters. An Executive Council advised the governor on all important matters and a 60-member Legislative Council (known as Legco) enacted laws and oversaw the budget. With the territory's transfer to China in 1997, leadership passed from the last British governor, Chris Patten, to a Chinese chief executive, Tung Chee-hwa. The Hong Kong SAR is governed under a 'mini-constitution'
called the Basic Law, which guarantees that the capitalist system and
way of life in Hong Kong will remain unchanged for 50 years after the
transfer to China. Under the Basic Law, a chief executive, appointed
to a maximum of two five-year terms, heads the government of the Hong
Kong SAR. An election committee, whose members are appointed by China,
selects the chief executive. The chief executive presides over the Executive
Council, whose members assist the chief executive in policy-making decisions. Hong Kong's free market economy is highly dependent on international trade, given that the territory has few natural resources. It has extensive trade and investment ties with China. Hong Kong's service industry over the past decade has grown rapidly as its manufacturing industry has moved to the mainland. Because Hong Kong's natural resources are limited, food and raw materials must be imported. GDP growth averaged a strong 5% from 1989 to 2006, but Hong Kong suffered two recessions over that period because of the Asian financial crisis in 1997-1998 and the global downturn in 2001-2002. Although the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003 also hit Hong Kong's economy hard, a solid rise in exports, a boom in tourism from the mainland because of China's easing of travel restrictions, and a return of consumer confidence resulted in the resumption of strong growth from late 2003 through 2006. Moreover, several large initial public offerings of Chinese companies on the Hong Kong stock exchange since late 2005 have helped to boost Hong Kong's status as a financial hub and have contributed to the improved performance of the market in late 2006. There are several strategic reasons for Hong Kong's high standing on the economic front. It is located midway between Japan and Singapore, and it lies astride the main shipping and air routes of the western Pacific. It also has long served as a major port of entry and trade for China, which uses Hong Kong as a primary link to the world economy. Furthermore, Hong Kong has a favorable atmosphere for business and trade. Hong Kong's economy has always been based upon commerce, trade, and shipping, and today it vies with Singapore as the world's largest container port. Industry and tourism are also important, and agriculture continues to provide a significant share of the territory's food and flower supplies, although Hong Kong must import the majority of its food. Every person entering Hong Kong must possess a valid national passport valid for six months. Commonwealth citizens and most European nationals do not need visas for a stay of up to 90 days. Hong Kong features a high number of world-class private facilities. Hong Kong has one of Asia's main airports, the Hong Kong International Airport. Located on the islet of Chek Lap Kok off Lantau Island, the airport opened in 1998, replacing the old Kai Tak International Airport. There is a passenger and freight rail service to Guangzhou. Hong Kong has an extensive network of roads in the New Territories, in Kowloon, and on Hong Kong Island. This network is supplemented by the Mass Transit Railway (MTR), which connects Hong Kong Island, Kowloon, and the New Territories. A 33-km (21-mi) electric trolley line operates on Hong Kong Island, and ferries shuttle between the mainland, Hong Kong Island, and all other major outlying islands. |
