Impact of Infrastructure Investments

Impact of Infrastructure Investments


I haven't looked at SQUAREFOOT magazine for a while. So yesterday, when I picked up the 1 Jan. 2014 Issue - No.187, I was surprised to find the information on the Property Index page, (pg.19)


They have a comparison between Four Different indicies, including the main "Mass Residential Index", and three indices which track different segments of the HK Property market. Two of the segments are related to infrastructure investments:


...


Index-------------- : 07-12 : 10-12 : 01-13 : 04-13 : 07-13 : 10-13 :

Mass Residential------ : 184.5- : 202.5 : 212.8- : 277.3 : 284.7- : 283.5 :

Luxury Index-------- : 222.2- : 221.4 : 248.2- : 330.1 : 314.6- : 332.7 :

Ratio: LI-to-Mass----- :

Kowloon East-------- : 186.5- : 206.7 : 214.6- : 280.5 : 291.7- : 287.6 :

Ratio: KE-to-Mass---- :

Shatin-Central Link--- : 185.6- : 204.6 : 209.4- : 303.6 : 283.1- : 296.5 :

Ratio: SC-to-Mass---- :

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What are these?

Luxury Index: Properties over 1,000sf in 10 HK locations, + Kowloon Tong, etc.


Kowloon East: Three districts highly affected by the "Energizing Kowloon East Program":

namely Kwun Tong, Wong Tai Sin, Kowloon City districts


Shatin-Central Link: Four districts benefitting from the MTR expansion:

namely Tai Wai, Diamond Hill, Homantin, and Hung Hom/ To Kwa Wan.

Index --------------------- : 07-12 : 10-12 : 01-13 :: 04-13 : 07-13 : 10-13 : Loss/Gn

Mass Residential--------- : 184.5- : 202.5 : 212.8- : 277.3 : 284.7- : 283.5 : +53.66%

Centaline Index, mo end : 106.5- : 114.4 : 119.1- : 118.8 : 121.0- : 119.5 : +12.21%

Ratio: CCLI-to-Mass----- : 57.7% : 56.5%: 56.0% : 42.8%: 42.5% : 42.2%: -26.98%

Sorrento, Kowloon Cent. : 16123 : 15744 : 16685 : 15024: 15186 : 17029 : +5.62%

Ratio: Sorr.-to-Mass----- : 87.39r : 77.75 : 78.41r : 54.18 : 53.34 : 60.07r : -31.27%

Ratio: Sorr.-to-CCLI----- : 151.4r : 137.6 : 140.1r : 126.5 : 125.5 : 142.5r : -5.88%


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That crazy jump from 212.8 to 277.3 (+30.3%) in Q1-2013 makes no sense,

and it undermines the credibility of the Mass Residential Index.