Check out Hong Kong property prices post Home Ownership Scheme

Home prices hit a record high of 106.85 index points.

According to Moody's, Hong Kong’s CentaData residential and mass market property price indices hit record highs for the week ended 17 August. The record property prices are credit positive for Hong Kong-based property developers because they support property sales and unit prices for their developments.

Here's more from Moody's:

Among our rated issuers, Sun Hung Kai Properties Limited (A1 negative) will benefit the most from buoyant property prices because it derives around 50% of its total revenues from property sales in Hong Kong.

As shown in the exhibit, the Hong Kong Centa-City Leading Index of current residential preliminary contract prices hit a record high of 106.85 for the week ended 17 August. The Mass Centa-City Index for mass market property prices also hit a record high and on a weekly basis rose faster at 1.47%, or 0.46 percentage points higher than the Centa-City Leading Index.

Property prices increased after the government’s July announcement that up to 5,000 non-public housing tenants would be allowed to buy flats under the Home Ownership Scheme (HOS) without paying the normal land premium. The announcement increased demand and prices on HOS-eligible flats because the new policy allows 5,000 qualified buyers to buy HOS flats with lower total considerations than before.

Sun Hung Kai Properties has 18.8 million square feet under development. It has for sale in 2012 four major residential projects in Tuen Mun, Yuen Long, Ma Wan and Tseung Kwan O totaling 2.3 million square feet. These projects target middle-income families, whose demand remains strong compared with the low supply of new flats of the past few years. In the absence of clear policy moves to curb property prices, the latest increase supports the sentiment of potential buyers for its projects.

At current property prices, the risk of government regulatory intervention increases because the government may try to introduce new measures to stabilize property prices. Since 1 January 2009, the Centa-City Leading Index has showed that property prices have increased by around 85%, while Hong Kong Land Registry data showed the number of first-half 2012 property transactions increased 42% from second-half 2011, but remains 34% below first-half 2011 transaction levels.