Home prices to continue climbing

A leading Chinese investment bank foresees property prices in Hong Kong jumping 10% this year despite government efforts to dampen soaring prices.

BOCOM international Holdings Company Ltd expects Hong Kong’s property market to continue to be driven upwards by low mortgage rates and high investment demand.

"The local home market will continue to be supported by low mortgage rates and strong fundamentals of the Hong Kong economy. There is no bubble in the local home market as local home owners are not over-stretched in their home mortgage loan lending," said Alfred Lau, BOCOM International property analyst.

BOCOM estimates that local home prices will jump 10% for the whole of 2012. Hong Kong home prices have now exceeded the historical high in 1997 and have soared over 85% since the start of 2009.

BOCOM International remained bullish over property developers’ shares investment prospects in the fourth quarter. It expects this share segment to outperform the entire market because of relative low valuations, flat sales launch acceleration in the coming quarter and the local home market's general buoyancy.

Home prices continue rising despite government measures to contain them, including tightenng borrowers' mortgage loan lending requirements, particularly borrowers who have more than one mortgage loan.

The government also launched a "Hong Kong land for Hong Kong people" policy that restricts residential flat sales to local residents only.

Other property firms predict a mixed investment outlook for local property shares in the fourth quarter, but all expect the property market to be fueled by low mortgage rates and high investment demand.

BOCOM International, one of the largest investment banks and securities brokers in Hong Kong, is the international investment banking and securities business flagship of China’s Bank of Communications Co., Ltd.