71.5 Per Cent, One Market Short
What the Number Counted
An estate agent in Tin Shui Wai had a 350-square-foot flat listed at just under HK$3 million from March through the end of May. 5 per cent in May against April. The listing did not move.
5 per cent is a value figure. Volume, meaning the count of individual sales, moved differently. 5 million each. A family that can spend HK$8 million moved in May. A family at HK$3 million is still looking.
The Standard reported this month that Hong Kong ranked first globally as a wealth management centre. 5 per cent point at the same group of buyers. That family is watching volume. In May, volume in the HK$3-million band did not move with it.
Where the Capital Stops
The Business Times reported this week that China's capital controls, the regulations Beijing uses to restrict how much money mainland residents move across the border, are beginning to constrain what the paper called a record Hong Kong property-buying spree. Mainland buyers have concentrated in the HK$8-million-and-above band. If that buying contracts, May's value figure does not repeat. The sellers in that band absorb it first.
A family in North Point or Kwun Tong asking whether upper-tier softening reaches below HK$5 million is waiting for Beijing's June decisions on capital flows. The May number answered a question about the HK$8-million band. It did not answer theirs.
An operator running two vans out of Cheung Sha Wan has borrowed against his flat, using property as collateral for short-term bank credit, the facility that covers fuel and stock between orders. The flat was valued near HK$3 million. Secondary values in outer districts have not tracked the upper-tier pace this year. The bank's valuation on his flat has not changed.
The estate agent in Tin Shui Wai has not changed the price. The flat listed at just under HK$3 million in March is still on the board. Beijing's June decision on capital-flow restrictions arrives before the Land Registry publishes June transaction data in July. One comes first. If the restrictions hold, the HK$8-million pace that produced May's figure does not carry into June. The flat at just under HK$3 million waits for the other number.