Young Hongkongers still keen to get first foot on property ladder even as prices spiral out of reach
Survey reveals 63pc of 20-somethings consider it a bad time to buy a property – but that’s down from 81pc at the end of last year
A new study has revealed a rise in the number of young Hongkongers still considering buying their first flat in the city, before prices spiral out of reach.
The poll, by Citi Hong Kong, asked a snapshot of 21 to 29-year-old, first-time buyers last month whether they felt it was a bad time to buy a home.
Sixty-three per cent said ‘yes’ – but that is a sharp fall on the 81 per cent who had said they would not contemplate buying a flat, after being asked the same question in the fourth quarter last year, said Citi.
Sammy Po, chief executive at Midland Realty’s residential division, said he had certainly seen a rise in desire by young people to buy a flat, since the turn of this year.
“They are hoping to get on the ladder of property while they can still afford to.
“Many are afraid that if they don’t take action now, they will never be able to own a flat in the city.”
Po said, however, that more than half of the young people surveyed said they will still have to rely on support from their parents to make the down payments.
Citi also talked to 500 buyers of all ages, and 69 per cent felt it was not a good time to buy, from 75 per cent in the fourth quarter of 2017.
“We have still seen large crowds of potential buyers looking to sign contracts recently at new launch sites, and record numbers entering the second-hand market,” added Po.
“It is not surprising, as many locals believe home prices will continue increasing.”
Nearly two thirds of those polled (64 per cent) by Citi expected Hong Kong home prices to rise over the next 12 months, the highest reading since the fourth quarter of 2016.
Midland now forecasts average prices to jump 10 per cent this year, while smaller units – ranging in price from HK$6 million (US$764,670) to HK$7 million – are likely to see larger 15 per cent rises.
Wong Leung-sing, associate director of research at property consultancy firm Centaline, expects an annual average price increase higher than the 10 per cent it forecast at the start of the year.
“They have already jumped about 7-8 per cent, but increases will slow in the second half,” Wong said, a view shared by Po at Midland, who added that price growth will moderate as supply increases towards the end of 2018.
Hong Kong home prices have now grown for 23 consecutive months, the longest stretch of gains in a quarter of a century.
New home prices reached an average HK$16.08 million in the quarter ending March, according to Ricacorp Properties, the second-highest, three-month reading since its records began in 1996.
Thomas Lam, a senior director with Knight Frank, added: “It seems there are no adverse factors that might materially affect property prices in the short term.
“Mortgage rates are still low, as is unemployment, and Hong Kong’s economy is doing OK.”