Bank of China sees continued housing slump
THE Bank of China says prices in Hong Kong's housing market will continue falling into early next year.
The forecast comes despite recent suggestions by property tycoons that the market was bottoming out.
The bank said in its latest economic report that housing prices would not bottom out in the next few months, taking into account the outlook for the territory's economy and future demand and supply.
The bank said the performance of the economy would slow in the second half, and it projected escalating unemployment rates and a drop in consumer spending. The Hong Kong economy's lack-lustre performance was making for poor investment sentiment, the report said.
The bank concluded that this would dampen the housing market.
Despite a projected drop in the supply of new flats, a large number of vacant apartments - 40,000 - not sold in 1994 were still on offer.
It predicted the total supply of apartments this year would reach 67,000 units, still surpassing demand.
The bank said the housing market would not see a rebound until after early next year.