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Despite government efforts to dampen the market, buyers are still gobbling up luxury properties in Hong Kong.
The number of transactions of more than HK$20 million ($2.6 million) was up 86 percent in the first seven months of 2010, according to Bloomberg News. Overall, prices have jumped 50 percent in the last year, even though the government has tried to restrict the market, in the wake of fears that the property bubble may soon burst.
Traditionally, Hong Kong has been a roller coaster ride for investors, with prices soaring and collapsing with regularity. The current surge is fueled, in large part, by buyers from mainland China, who accounted for a third of new purchases in the first half of the year, according to government data.
In response, the government has limited mortgages, opened new land for development and restricted the benefits to foreigners. But none of the measures seem to be turning away buyers, especially in the luxury areas.
“All the government measures are not going to impact luxury housing much, because they don’t use a lot of leverage,” Nicole Wong, a real-estate analyst with CLSA Ltd., told Bloomberg.
