Shanghai real estate prices to overtake Hong Kong’s
Want to strike fear in the hearts of Shanghairen? Talk about Hong Kong real estate prices. Works every time. We might love to shop there, but after being used to the cushy Shanghai real estate market, Hong Kong prices are nothing locals want to mess with.
Even with the real estate bubble, most prices have stayed in the relatively reasonable range, but according to a recent Bloomberg report, all that’s about to change.
The site reports that Joe Zhang, deputy head of China investment banking at UBS AG, says “Shanghai and Beijing’s luxury home prices may increase 15 percent each year to overtake Hong Kong in the next five to 10 years.”
Although the government has recently tightened real estate policies in Shanghai and Beijing, most notably limiting the number of new homes residents can buy, the reports says this will only delay the inevitable.
“It doesn’t matter what the government is doing, whether we have 100 new measures or 10,000 new measures,” says Hong Kong- based Zhang. “In the long term, all these are noises and will disappear, and only one variable matters -- money supply.”
What does that mean for the average Shanghai home buyer? It depends where you’re looking.
The report says that the prices of the top five to 10 percent of homes in Shanghai (luxury properties) will continue to climb, soon surpassing prices in the Hong Kong market. People looking in the lower and middle ranges of the markert aren’t exempt from the price hikes, they just won’t be as drastic as those seen in the upper end of the spectrum.
Shanghai real estate prices, specifically home prices, rose for a 17th month in October from a year earlier, gaining 8.6 percent, reports the Chinese government.