Hong Kong property buyers look to 2013 with uncertainty

As a tumultuous year in the Hong Kong property market comes to a close, many owners and investors are assessing their options for 2013.

Plenty expect a decline in prices, perhaps even a crash at some stage. But that's not useful information. We all know Hong Kong property will crash at some stage. The question is, when? If you wait for a crash of 30 per cent, and property prices increase by 400 per cent in the meantime, that expectation doesn't do you a lot of good.

Given the rapid and largely unchecked price increases of recent years, however, it's likely the crash is due sooner rather than later.

The government's interventionist policies certainly have contributed to a cautious mood among property investors. At the same time, though, the likelihood of rampant inflation once Western economies rebound, coupled with a total lack of returns in bank deposits and unpredictable equity markets, are factors chasing investors to hard assets such as property, commodities, gold, art, fine wine and the like.

So when will Hong Kong property see the correction most expect? Despite our hunches, it is likely to be later rather than sooner, according to analysts, as a result of the generous printing of money in the United States.

Alfred Lau, the Hong Kong property analyst at Bocom International, said he was puzzled by comments from Stanley Wong Yuen-fai, the chairman of the subsidised-housing committee of the Housing Authority, who last week indicated that he thought property prices ought to fall 20 per cent before they reached reasonable levels.