Buyers are ‘juggling with knives and razor blades’
David Watkins, Agence France-Press
Province
A Hong Kong real-estate office window promises price cuts.
HONG KONG — Window displays at the Hong Kong real-estate office where Stephen Poon works are bursting with cut prices, last- minute reductions and cash incentives. But buyers were still few and far between, as the stumbling global economy has cut dead the city’s five-year booming property market.
“It has been very quiet,” said Poon, an agent for Midland Realty, describing a 98-per-cent drop in revenue.
“I have six kids. Three are at university in the U.K., where fees are high,” said Poon, whose commission has suffered.
The global financial crisis is rapidly stunting Hong Kong‘s office, luxury and residential property markets after they hit a peak in the early summer.
Signs outside agents have shown discounts of more than a million Hong Kong dollars in recent weeks, and analysts said they expected prices in every sector to drop by an average of 20 to 30 per cent before next July.
With sellers reluctant to lose value and many potential buyers holding off amid stock-market turmoil and tightening lending conditions, many agents have already lost their jobs.
Nearly 5,000 agents in Hong Kong and China have left its biggest property group, Centaline, since June as the firm struggles with plummeting commissions, its chairman Shih Wing-ching said.
“[Before the slowdown] 10,000 to 12,000 units were being sold in Hong Kong each month, but October saw half that amount,” he said.
Anyone buying in the hope that property values will appreciate over the next year is “juggling with knives and razor blades,” said Chris Dillon, author of a recently published guide for buyers in the territory..
© The Vancouver Province 2008