Hong Kong to transform into buyers’ market soon?

hong-kong-to-transform-into-buyers’-market-soon.jpg

The residential property sector in Hong Kong could witness a double-digit reduction in prices of homes over the next year as per reports. This could make the market more favourable for homebuyers looking to purchase their own properties in one of the costliest property markets in the world. A fall of 15% is forecasted overall in home prices over the next year although this could spark large-scale residential transactions, thereby driving growth of the sector due to enhanced demand.

Hong Kong has always been ranked as one of the most expensive places to purchase real estate in the world. Prices have been going up steadily over the last few years but are now set to fall due to several factors like increasing rates of interest, the depreciation in the Rmb and a slower economy in general. Prices have already increased by 14% in 2018 although they could reduce by 15% as per reports over the next 12 months. The HIBOR (Hong Kong Interbank Offered Rate) is steadily coming close to 2% after remaining below 1% over a major part of the previous 9 years.

The Hong Kong Government took a few measures in June for keeping a lid on the increasing housing prices by coming up with a tax for new and vacant apartments with an eye towards enhancing overall supply levels and keeping speculative investors at bay. This decision is still awaiting legislative clearance. However, experts still feel that prices could go up a little more for the rest of 2018 before the steady decline although the growth rate will be slower now. Residential prices could still increase by 10-13% overall for 2018 as per expectations.

Some investors are still confident about property prices riding out these factors since land supply levels will not go up overnight. The shortage of approximately 108 hectares till the year 2026 should keep prices growing by 5-10% annually over the next 4-5 years as per several experts subscribing to this view.