Property boss rejects 'sleepy backwater' talk

Themis Qi

Real Estate Developers Association chairman Stewart Leung Chi-kin does not think the property market is "a sleepy backwater" and, in a more optimistic tone, expects a full-year rise of at least 5 percent.

Developers and professionals gathered yesterday at a Sing Tao News Corporation forum to share their forecasts about the property sector.

It comes on the heels of home prices rebounding for only two months after the removal of housing curbs in late February and retreating in May.

Leung, also the chair of Wheelock Properties, said he thinks despite the challenges ahead, including the global economic downturn, the market can rebound quickly, basing this on his more than 60 years of experience in the sector.

He expects improvements to come by year-end as the administration and the central government are taking measures to boost the economy.

Billy Mak Sui-choi, an associate professor at Baptist University, projected that the US Federal Reserve will lower interest rates this year, but only by 0.25 to 0.5 percent, which is not enough to stimulate the sector. He sees a higher possibility of a rally in home prices next year.

Eddie Lam Yat-ming, a senior lecturer at Hong Kong Metropolitan University, thinks investors will not come back until the interest rates of time deposits retreat to 1-2 percent and this process may take three to four years.

Lam described the current property market as "a sleepy backwater" in which home prices will not rise or fall significantly and transaction volume remains low. This is also due to the aging population, he added.

But Leung disagreed, saying many opportunities come with challenges. He believes the sector will recover and prices rise by 5 percent this year, helped by the administration successfully attracting talent and new investments.

Additionally, Leung said the sector cannot escape the economic downturn and urged the administration to roll out more stimuli.

Private developers also expect more support, Leung added. He said the private sector has contributed over two million homes, which is more than a million public flats offered by the administration, and that developers can act faster to meet demand.

Mak and Lam said nonlocals and new immigrants would become new drivers.

At the land planning panel, Legislative Council member Louis Loong Hon-biu said the development of the Northern Metropolis must start with infrastructure, which will affect land sales.

Lawmaker Tony Tse Wai-chuen said the outline zoning plans should be updated and adjusted according to market changes.

To this Francis Lam Ka-fai, head of Hong Kong Institute of Surveyors, suggested making OZP applications easier.

themis.qi@singtaonewscorp.com