Luxury Property in Hong Kong Sees Softening Sales

Colliers International in Hong Kong have just released their second quarter market report, and if ever you were looking for a positive spin on a poor performance, this is it. According to the report,

Notwithstanding the uninspiring sales volume, the average transacted price increased 8.2% QoQ to HK$14,868 per sq ft as at the end of May 2008, thanks to the limited supply of luxury stock, sustained occupational demand and the general expectations of growing inflation.

Translation – much like New York’s luxury real estate market, median prices are rising because the only property selling is the very high-end stock. Every thing else is sticking with unrealistic prices being demanded by sellers.

“Uninspiring,” would be an understatement, because the report also states that the total number of residential sales units shrunk by 34% QoQ during the three month period ending May 2008 and the number of sales over $10million HK ($1.3 million) fell by 44% in the three traditional luxury residential districts: The Peak, South Side and Mid-levels.

Some how the outlook is rosy for Hong Kong’s luxury residential market, and the only bright spot in the report is the continuing rise in costs of renting serviced apartments, prices of which increased by 5.8% during the same period.

Hong Kong of course, always suffers from limited supply. The full report is available as a PDF download here:

Colliers International