C point of view | Repeated rises are still the main theme of property price trends
The Central Plains City Index (CCL) reported 146.35 points last week, up 1.01% on a weekly basis; indicating that the decline last week was only temporary and has not yet formed a clear trend.
Since the government completely withdrawn spicy food, CCL has risen for three consecutive weeks, with an increase of 2.84%. There was a reversal in the fourth week, from rising to falling, with a decline of 1.5%. The pessimists then made wild claims, saying that the rebound in the property market caused by the withdrawal of spicy food had been completed, and that Hong Kong’s property market would return to a repeated downward trend.
I don’t agree with this view. I think that so far, the main theme of property price trends is still upward. A few weeks or two of fluctuations are not enough to change this main theme.
The trend of any market is wavy and rarely rises or falls in a straight line. The shorter the statistical period, the more opportunities there are for recurrences. CCL collects statistics once a week, so even minor fluctuations can be reflected; the Rating and Valuation Department’s property price index only collects statistics once a month, so the trend will be relatively stable. The fluctuations that occurred in CCL the previous week will not be reflected in the difference. This is reflected in the Rating and Valuation Department’s property price index.
Based on the information I have obtained from the front line, I can predict that the Rating and Valuation Department’s property price index will not only rise in March, but also in April. It will only have a chance to hover at a high level in May, and it will have to stay at a high level until the second half of the year. Only then can I meet Zhenzhang.
There are some comments in the market, taking Cheung Kong’s new project Blue Coast as an example, which failed to clear the market despite losses, pointing out that the rebound triggered by the withdrawal was limited and soon showed signs of weakness. The reality is that Cheung Kong’s new projects sold very well, with a total of 10.1 billion cashed out, breaking the record in Hong Kong’s history. How can we say that the property market lacks motivation just because it fails to clear all the money in one fell swoop? You must know that Blue Coast is a pre-construction project and will not be occupied until a year later. Cheung Kong still has enough time to clean up the “slip” before moving in. Developers should be very satisfied with such results for off-the-plan properties.
What is the purpose of describing a new project that is selling well as a poor one? I just want to set a high standard first so that the sales of other new projects in the future will appear even worse. In fact, in most places in the world, there is no such thing as a property sale that can clear all the money in one go. The developer is very happy to be able to sell half of the property in the first cycle and 70% before moving in.
Given the current market conditions in Hong Kong, it should not be difficult for developers to achieve the above sales. Those who sell well will not only be able to open new projects, but also have the conditions to clear the inventory, improve their financial situation, and have the ability to participate in the bidding when the government sells land next time, further improving the market atmosphere.
Of course, I also understand that the rebound in property prices caused by the withdrawal of spicy food peaked in March, and the aftermath will last until April or May, but it will return to normal by June. However, this return to normal does not mean that the market situation will return to the situation before the withdrawal of the epidemic, because after the withdrawal of the epidemic, the market will no longer rely entirely on users. When investment demand is included, the market will behave differently.
