Hong Kong's Land Registry reported that the value of February's property transactions were up 95.3% over a year ago. Although this percentage is down for the year 2008, January's property transactions were 23.3% higher than last year. Last month's transactions totaled HKD$52 billion, of which $43.8 billion were from residential property sales – overall, 12,581 residential transactions were reported. While this was a 15% decrease from January, it is still 61% higher than last February.
Despite the property market's success, there is still much uncertainty with regard to Hong Kong's economy. Over the past couple of days, share prices have closed much lower and it is believed that several factors have led to this shift. For one, the floundering U.S economy has been affecting markets on a global scale. Because of these economic issues, the dollar has been steadily losing value. Coupled with high oil prices, many investors are willing to take a "wait and see" approach.
The U.S economic concerns are having a knock on affect in the Asian economies. Poor corporate earnings due to an increase in the price of raw materials as well as reduced consumer spending has made many on the other side of the Pacific wary. While as a whole Hong Kong shares were down, some companies still maintained a high position. One example is the gold firm Zhaojin Mining, since the U.S dollar is weakening, gold prices are continuing to rise.
Many investors are being very cautious after the results released by HSBC. Despite HSBC's pretax profit being up 10% over last year, many are watching to see how sub-prime issues will effect earnings. Many investors appear to be waiting for clear information on how HSBC will be affected by US housing and lending issues.
