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Extract from Par Eastern Economic Review
No. 15 dated April 13th 1949.
HONG KONG REAL ESTATE MARKET.
24
2.
Due in the main to conditions in China, 1948 saw the peak of the greatest boom in land values ever experienced in Hongkong.
Whilst the value of all land appreciated, the rise in value of plots of land suitable for apartments showed by far the greatest increase, and some of the most suitable sites changed hands several times during the year in an upward surge. A great many of the buyers were people connected with the building trade, and there are few contractors who have not embarked on building on their own account, realising that it was possible to build well below the current market price. Those who completed their flats by October/November reaped a very fair reward and were able to recover up to 30% of their total outlay in high "Construction Money".
The cost of building gradually fell throughout 1948 and today it is again slightly lower, though the main charge, that of labour costs, remains unaltered.
It would appear improbable that there will be any great reduction in the cost of labour in 1949, nor for that matter for quite some time to come, but there can be no
question that Hongkong labour is thoroughly inefficient and considerable savings could be ef ected provided there was greater supervision.
An undue proportion of the cost of flats and houses in Hongkong is contained in the basic value of the land, and it is difficult to see how sufficient people can be found to pay the high rents required to provide owners with a reasonable return on their capital outlay.
The average cost of flats in Hongkong and Kowloon, suitable for Europeans, varies from $60,000 to $120,000 and rents vary from $600 to $1500 per month, though there were very few available at the former figure. In fact, it has been almost impossible to obtain a flat on a rental basis without payment of large "Construction Money".
There are at the present moment a large number of vacant flats which the owners are anxious to sell but not. rent, and, now that the large majority of the big companies have sufficient accommodation for their staffs, buyers for this type of property are few and far between.
Not unnaturally, due to the large increase in land values, many firms and individuals, who have not previously indulged in land development, have seen fit to carry out building enterprises, and the majority of them had such inlated ideas of their properties that they missed the top of the market. Many of these would-be sellers have already followed the market down but they have still failed to dispose of their properties. A number of these people believe that events on the North may result in another influx of wealthy
(Chinese