Hong Kong Residential Real Estate Is Having Its Problems
HONG KONG -- If the time to buy is when nobody else likes a particular sector, this is the week to snap up shares in Hong Kong residential real-estate developers.</br></br>Then again, all of those people bidding down the stocks are probably right to sell, at least if they want to make a profit in the next year or so.</br></br>This is a sector with problems: Most of the tycoons who own the companies have yet to weigh in with anything positive, such as share purchases, and real-estate prices in Hong Kong remain stuck about 50% below their 1997 peaks. Prices had looked as if they were bottoming out two weeks ago. But then came the terrorist attacks in the U.S., which analyst Andrew Lawrence at Deutsche Bank says knocked 5% to 10% off prices of used apartments.</br></br>So, while Hong Kong property may still be expensive by world standards, by the city's measure it is going cheap. Gloom emanates from the city's boardrooms.</br></br>This was Ronnie Chan, chairman of the Hang Lung Group, reporting results Monday for one of the few stocks in the sector analysts seem to like: "In view of the very weak market with much uncertainty, land acquisition must be done with extreme caution. Prices, profit margins and transaction volumes are all falling and will likely stay low for the foreseeable future."