It is quite a different story for the market situation today despite the fact that local mortgage rates have retreated again to extraordinarily low levels near the historical trough in 2003. The economy saw a healthy growth with inflationary pressure, rising salaries and unemployment rate falling to a 10-year low. Most importantly, the strong rental growth along property price increases has eventually led to a ???buy better than rent??? development. According to transaction records, the average home price of major estates has increased by 30.6% from $3,194 per square foot in early 2007 to $4,170 per square foot in February 2008. During the same period, average rental also recorded strong increases and grew by 25.9% to about $18 per square foot a month.

Supported by the underlying demand for housing, the current phenomenon of ???to buy is cheaper than to rent??? has a stronger backing than the situation between 2001 and 2003. The rental yield stands at more than 5% now with a further upside for the leasing rates. The sustained leasing performance is providing a solid foundation for the property sector. More and more end-users probably will switch from leasing to purchasing their own homes under the prevailing conditions while investors will also look for opportunities as a result of the attractive yield.

Residential rents are expected to grow further given the solid economic performance and rising inflation. At the same time, interest rates will stay at a low level and may see more downward adjustments. The prevailing ???to buy is cheaper than to rent??? development is certain to last a longer period and hence serves as a strong booster to the property market??s future growth.