LEADING Hong Kong analyst Michael Green says everyone else has it all wrong - home prices have not fallen by as much as some claim and values will actually rise seven to nine per cent this year, not fall. Addressing the Hong Kong Investment Analysts' Association, Mr Green, executive director of Nomura Research Institute (Hong Kong), said the housing market would achieve growth potential in the coming 12 months. He also expected another significant upward trend during the last part of 1997 following through to 1999. His confidence in property was supported by the historically robust performance in the territory's market and the prediction that those negative factors crippling the housing sector would be swept away in the next 18 months. 'Mortgage rates will be much lower and the Sino-British disputes will be out of the way,' Mr Green said. Moreover, other bad news such as the worries over the health of China's paramount leader Deng Xiaoping at that time should no longer adversely affect the property market. Mr Green also predicted a housing shortage in the second half of 1997. He said the supply of completed projects on the market now was in the balance because of the number of new projects. However, the imbalance would appear in the second half of 1997 because developers were cautious about new projects under the present adverse conditions. The shortage of supply was expected in about two years, he said. Mr Green said also that the real estate image was not as poor as painted by other analysts or agents, who reported a 20 to 30 per cent plunge from the peak. It was more like 15 per cent despite a substantial drop in asking prices and therefore property stocks were 'undervalued' and he recommended investors to come back. 'In the next 18 months, there will be the good value in the property sector of the market,' Mr Green said. 'Smart investors are ready to come to the market.'
