HONG KONG, April 3, 2008 /Xinhua-PRNewswire/ -- The Royal Institution of Chartered Surveyors (RICS) announced today its Global Real Estate Updates.
HK Property stocks weaker despite negative interest rates
Reports that prices have been cut across the New Territories have stoked volatility of several Hong Kong property stocks in recent days. Property shares have been dragged down in 2008 by concerns over more challenging conditions for developers and the economy amid tougher credit conditions. Since 2008, fears of a US recession have taken centre stage despite expectations that rate cuts might support the Hong Kong residential market in 2008.
With the Hong Kong dollar tied into monetary policy from the Fed, the 75% basis point cut has now sent real interest rates in Hong Kong into negative territory. Under normal circumstances, such cuts would ultimately stoke further asset price inflation in the housing market. However, with the collapse of Bear Stearns highlighting the ongoing problems faced by banks, this has raised downside risks to the growth outlook in Hong Kong.
Japanese housing starts to plateau amid weaker economy
Japanese housing starts will provide an insight into whether rising construction costs, a slowing Japanese economy and greater uncertainty have muted residential development. Housing starts have picked since the summer following disruptions to the planning system although RICS expects the recent recovery to plateau in the coming months. Price rises across both residential and commercial land for the second consecutive year following over 15 years of declines.
Residential property values rose approximately 1.3% in 2007 following a 0.1% annual rise in the previous year. However, wage growth has stagnated in recent months and growing headwinds are hitting the Japanese economy through higher oil prices, a stronger yen and a slowing in the global economy. Tentatively signs suggest that a recovery in land values may be stalling. Sales of new apartments in Tokyo fell to a 15 year low in February according to the Real Estate Economic Institute. Indeed, talk of a near term interest rate cut is now firmly back on the agenda although RICS expect rates to remain on hold in the coming months with the BOJ reluctant to use up its limited ammunition.
Media enquiry, please contact:
RICS Asia Pacific Public Relations Representative
Ms Belinda Chan / Ms Katherine Chow
Tel: +852-2372 0090
Fax: +852-2372 0490
Mobile: +852-9379-3045 / +852-9256-3223
Email: belinda@creativegp.com / kat@creativegp.com
