Hong Kong consumers wary of property risk
Hong Kong consumers' confidence in property has plummeted for the third consecutive quarter to a record low since a City University survey began last year.
The poll sampled the opinions of more than 1,000 people late last month and the conclusion was they are not that optimistic about buying flats.
Pollsters said the consumer confidence index for flat purchases scored only 66.3 out of 200. The figure, a drop from 75.5 in the third quarter last year, sank to a record low since the research began early last year. The index uses a scale of 0 points, which represents no confidence, to 200 points referring to complete confidence. Scores below 100 suggest people lack confidence.
'Flat prices have rebounded a lot since last year ... the score shows that people don't think it's now a good time to buy a property,' Dr Geoffrey Tso Kwok-fai, the university's management science associate professor, who conducted the survey, said.
'For those who want to buy a flat for their own use, they worry they can't afford one; while for investors, the low score shows that they have a dim market outlook,' he said.
Apart from the drop in home purchasing confidence, Tso said he was also surprised to see that concern about inflation had risen significantly. This is reflected by the significant decline in the consumer prices confidence index, from 75.5 points previously to 66.3. 'The main reason is consumers are not satisfied with prices which start to perk up,' he said. 'Particularly, people who earn HK$10,000 or below a month are more sensitive to inflation, while they do not see their income growing.'
This echoed the views of Chief Executive Donald Tsang Yam-kuen, who said in a Legco meeting last week that the surge in prices after the new year would increase low-income families' financial burden. The government would consider introducing measures to help them. Despite people being pessimistic about home purchases and consumer prices, the latest survey also found their confidence toward the city's economic development continued to rise to a year-high of 102.3, the first time the figure has exceeded 100.
This newfound confidence is still lower than the figure for mainlanders at 125.5, and Macau, at 116.6, but higher than the score for Taiwan, which sits at 57.1. These scores were calculated by five other universities after interviewing more than 1,000 people from each location.
The Hong Kong public are more optimistic regarding employment, with a score close to 100 - as the jobless rate declined gradually from 5.4 per cent in April to 5.1 per cent. But these residents have a slightly dimmer outlook on the stock market and living standards. The study also found the overall consumer confidence index, which measures consumer sentiment in six areas from home purchases to employment, is 88.4 for Hong Kong, down from 90.3 in the third quarter of last year.