High End Projects Will Be Less Affected By Property Cooling Measures
High End Projects Will Be Less Affected By Property Cooling Measures
Real estate business serves as one of the pivotal factor in development of the country’s economy. But due to certain malpractices such like speculations, over investment and unrealistic prices, the economy is likely to suffer inversely. Recent global depression can be viewed as a case in point. Banks, over a period of time, developed their business by lending maximum loans for the real estate sector. But due to unhealthy activities in the sector, the results could be devastating for the overall financial outlook of the financial institutes in the country. Another ill effect of such unrealistic price hike in real estate is the suppression of genuine buyers from the middle and lower class. The ever rising prices remain out of reach of the commoner.
On Aug30 government announced certain measures to arrest this trend of unrealistic rising prices of real estate in the country. Main purpose of these measures is to prevent national economy to from unrealistic investments and to secure the financial infrastructure from any future depression. These measures are likely to prevent the genuine buyers to stay relevant to the market. This decision has been taken very timely as the recent prices seem to be raised unrealistically to the level which is not sustainable in the future. Many sources have confirmed that the decision has been well received by the majority affiliated with the real estate business. The focus of these measures has been the middle and lower class investment and purchase/sale majority.
Amid the new rules enforced Wing Tai has released its remaining 67 units for sale. Previously the 109 units were sold at the price of $2000 to $2700 per square foot on the average. Price for the newly released units has been kept from $2300 to $2800 per square foot. The firm officials have expressed hopes that these high end price units will be less affected by the measures announced by the government. High end projects are invested by the foreign investors besides the local investments. This very aspect is likely to render such high end priced projects to still earn good dividends. This has been amply demonstrated by the Wing Tai’s recent high end priced project. Market players are very critically observing the latest market trends in the light of new measures.
After the announcement of the anti-speculation measures the present bids for different project sites are still towards the higher side. However, it is felt that these will be re-adjusted after some time as the market may not get much of revenue from the banks and the purchasers. Still it is felt that the projects for high end, upper middle class and super high class will be less affected by the measures announced.
Banks have now started getting the effects of these measures. There has been a drop in loan application for the housing projects. Banks now will have to devise new market policies for the investment instead of only focusing on the real estate sector. They still have a scope of growth if they bring the loan rates under an affordable range for average citizen.
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Mindy Yong
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