Hong Kong socialites used to appearing in the
entertainment notes of the Chinese press have lately been turning up
instead on the front pages of property news.
on a buying spree
The property sections of the main
Chinese-language newspapers have read like a who's who of high society
in recent weeks as the well-heeled have gone on buying sprees,
spending millions on new flats and houses on Hong Kong Island.
Credit: SCMP graphics
Heading the buying frenzy has been former actress Chiang Lai-ping, the
daughter of wealthy Chiang Chen, chairman of Hong Kong-listed Chen
Hsong (Holdings), which makes plastic injection mouldings.
Ms Chiang has reportedly spent more than $12
million on five two-bedroom apartments in Sun Hung Kai Properties'
Sham Wan Towers, a new development in Ap Lei Chau.
Sham Wan Towers has also attracted
beautician Cheng Ming-ming and socialite Szema Yin. Ms Cheng paid
$13.5 million for five units, while Ms Szema paid about $12 million
for four flats.
Ms Cheng earlier bought units in the luxury
residential projects Residence Bel-Air in Pokfulam, Parc Palais in
King's Park Rise and Regalia Bay in Stanley.
Cantopop singer Miriam Yeung obviously had
investment as well as a home on her mind when she paid more than $30
million for a new detached house of 4,000 square feet in Regalia Bay,
Property agents say these purchases indicate
investors are back in the market - a factor necessary to push up
But is history repeating itself?
Seven years ago, socialites and celebrities
caught up in the excitement of the property boom spent a fortune
buying luxury units.
SK Pang Surveyors managing director Pang
Shiu-kee said a lot of celebrities turned into property speculators in
"Looking back, how many of them made
profits? Some went broke when the property bubble burst in 1998,"
Among them was Cantopop singer and actor
Kenny Bee, also known as Chung Chun-to, who declared himself bankrupt
in 2002 after failing to repay huge debts arising from losses from
real-estate investments made with his socialite ex-wife Teresa Cheung
Siu-wai during their marriage.
The couple, who divorced in 1999, reportedly
took out loans totaling $154.4 million at the height of the property
boom in 1997.
They are believed to have invested in five
luxury apartments - in Shouson Hill Road, Redhill Peninsula,
Plantation Road, Repulse Bay Road and Convention Plaza.
While realtors said a new group of socialite
investors was emerging to replace those burnt in the 1998 crash, Mr
Pang sounded a note of caution. Signs that celebrities were active in
the property market did not mean a strong recovery was under way, he
"Celebrities usually play a modelling
role for the public. Property agents intentionally leak news of
celebrities investing in properties in the hope of luring the general
public into buying," he said.
"But celebrities are not experts in
real estate, so would-be buyers should not be influenced."
Would-be buyers should consider the key
factors of affordability, job security, interest rate trends and the
city's economic outlook before deciding to buy property, according to
Property speculation was a dangerous game to
play, especially if prices rocketed, he warned.
"Speculators want to buy and sell for a
quick profit. It's a bit like musical chairs . . . someone
gets their figures burnt when the music stops.
"When a mass housing project in Tsuen
Wan is selling for as high as $3,000 per square foot to $4,000 per
square foot, how much profit can the buyer make when he sells in the
secondary market?" he asked.
Cheung Kong (Holdings) has sold 90 per cent
of its jointly owned low-density Tsuen Wan development The Cairnhill
for an average price of about $3,500 per square foot. The development
comprises 770 units ranging in size from 1,199 sq ft to 1,883 sq ft.
The company said 35 per cent of the buyers
at The Cairnhill were investors.
Mass housing prices have reportedly risen 20
per cent since last August, while luxury home prices are estimated to
have jumped 30 per cent or more.
The rises have been spurred by the inflow of
hot money, historically low interest rates and the government's policy
of regulating the supply of flats, according to the Bank of China
(Hong Kong)'s latest research report.
If Hong Kong's economy grew by about 5 per
cent, as economists expect, flat purchases could exceed the
20,000-unit average of the past five years, ending the oversupply of
flats before 2007, the bank said.
Bank of China (Hong Kong) economist Michael
Dai Dao-hua said buyers should be cautious of prices rising too fast.
"Current economic fundamentals are not
supportive yet of a large surge in property prices as [Hong Kong's]
economic transformation is a long-term endeavour," he said.
People should be wary of an overheated
property market. There was a danger of the economy not being able to
support a property price surge driven by speculators' expectations of
dwindling flat supply, he said.
"If prices surge too fast within a
short time frame, such as 12 to 18 months, the market will become
volatile and it may not be in the best interest of the healthy
development of the general market."
Mr Dai said the market had not reached alarm
levels yet, even though speculators had been active in the luxury
housing sector. "The residential market, as a whole, has so far
performed steadily," he said.
He estimated 20 per cent of residential
property buyers over the past six months were investors, compared with
50 per cent in 1997.
"While everybody is finding solace in
the reviving property market, there is still a need for caution,"
he said. -
China Morning Post
4 Feb 2004