Residential market poised for roller-coaster ride

PUBLISHED : Tuesday, 17 March, 1998, 12:00am
UPDATED : Tuesday, 17 March, 1998, 12:00am

Hong Kong's residential property market is poised for a roller-coaster ride this year but a recovery is expected to take shape by early 1999, according to DBS property analyst Winnie Chiu.

Ms Chiu said the recent rebound in residential property values would be short-lived given the sharp jump in new releases.

She estimated there would be close to 39,000 new units available this year, representing an 81 per cent jump from last year's 21,312 units.

'In this rising supply environment, we forecast prices to increase another 5 per cent [in] March and April because of pent-up demand, followed by a 25 per cent fall as new supply is released,' she said.

'All in all, we foresee a 45 per cent price correction from the July 1997 peak.' She said residential prices probably would recover next year, due to constrained long-run supply and rising demand.

She said investors who bought shares of leading property companies could expect a 30 per cent plus return over the next 12 months.