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Half of Hongkongers think property prices will rise in next 12 months, Citibank survey finds

By Zoe Lowzoe.low@scmp.com

/ https://www.scmp.com/business/article/3008153/half-hongkongers-think-property-prices-will-rise-next-12-months-citibank?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp |

April 30, 2019 4:15 PM SGT

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About half of Hongkongers think the city's property prices will rise in the next 12 months, according to the quarterly Hong Kong Residential Property Ownership Survey, conducted on behalf of Citibank by the University of Hong Kong's Social Sciences Research Centre. In comparison, only 18 per cent expected a price increase in the last quarter of 2018.

The survey, released on Monday, also found the number of respondents who felt it was a "bad and terrible" time to buy a home in the city fell by 10 per cent from the last quarter, but still stood at 57 per cent. Only 4 per cent of the 500 respondents polled in March for the survey thought it was a good time to buy property.

"I'm not sure who they surveyed, but I have to disagree because we have just made a record-breaking number of sales this quarter," said Louis Chan Wing-kit, Asia-Pacific vice-chairman for residential at Centaline Property.

Over the weekend, the sale of the Centra Horizon project in Pak Shek Kok too attracted 4,950 registrations of interest for 295 flats, or 16 bidders for every available unit.

"It is possible home prices in Hong Kong will increase 10 per cent and hit new highs by the end of the year," Chan added.

Buyers queue for the 295 apartments at Centra Horizon in Pak Shek Kok on Saturday. Photo: Jonathan Wong

US investment bank Morgan Stanley has also revised its outlook from a more downbeat 2 per cent growth in January to a bullish 10 per cent, citing a decision by the Federal Reserve to halt interest rate increases, which has kept mortgage rates low in Hong Kong.

However, buyers should remain cautious about uncertainties around the US-China trade talks, while Hong Kong's economy is expected to slow this year, said Joseph Tsang, JLL Hong Kong's managing director and head of capital markets.

"The market is still fragile. Although at the moment it looks like it's hot, one needs to bear in mind things might change rapidly. There are dangers ahead," he said.

Joseph Tsang, JLL Hong Kong's managing director and head of capital markets. Photo: Felix Wong

Alva To, vice-president and head of consulting for Greater China at Cushman & Wakefield, said: "Buyers might think the potential for prices to increase are limited as home prices are already high, and they do not want to take the risk."

The number of respondents aged between 21 and 29, who were interested in home ownership, rose from 19 per cent in the last quarter to 37 per cent, while 31 per cent of unmarried respondents were also "extremely or slightly interested" in buying a house.

The increased interest among young buyers was also in line with sales figures from Centaline. About half the buyers in the first quarter of 2019 were young couples aged about 30, Chan said. "Young people would now rather buy a house, because paying a mortgage is cheaper than paying rent," he said.

JLL's Tsang said worried parents were also more willing to provide financial support to their children so they could afford to get on the property ladder, which might also contribute to young people's rising interest in property.

Elsewhere, JLL's residential sales market monitor noted a decline in non-first time and foreign homebuyers based on a decrease in the proportion of home sales subject to double stamp duty and buyer's stamp duty, taxes levied on non-first time and foreign buyers.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved.

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