Plot twist: Hong Kong property prices may not fall this year
Plot twist: Hong Kong property prices may not fall this year
In fact, prices in the Chinese SAR could rise in 2017
Contrary to expectations, Hong Kong home values may not head downward in the last months of the year. If anything, they are set for a decent lift in 2017, according to some analysts.
“This year, we do not expect prices to fall,” Thomas Lam, head of valuation and consultancy at Knight Frank, told the South China Morning Post last week.
The pronouncement scrubs a previous prediction by the property consultancy that sees home prices in the Chinese SAR declining by 5 percent to 10 percent for the rest of the 2016. They had noted however that the drop would occur on a “gradual downward slope” rather than a precipitous drop.
Home values in the Chinese SAR may even rise next year, according to Macquarie. In a report released last week, the investment bank expects home values to rise by 5 percent in 2017, with sales volumes growing by 15 percent.
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This shift is happening as Hong Kong is being framed as a safer haven than post-Brexit European markets for capital flows. A “continuous recovery of Hong Kong property” may be expected in the wake of the British referendum to leave the EU, Macquarie said.
Hong Kong home prices are also rising due to an uptick in mortgage rate promotions and competitive financing schemes for newly launched property developments.
Prices in the Hong Kong market remain among the world’s highest, even for luxury consumers. “Most fundamental indicators still show property prices at historically high levels,” with affordability in terms of price-to-income ratio “already highly stretched,” Moody’s analyst Sherry Zhang told the Post.
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Source: Property Report