A combination of the ongoing credit squeeze, rising unemployment and uncertainty over interest rates will dampen the residential property market over the next 12 months, according to Jardine Fleming Securities.
Regional property research director John So said available liquidity in the market remained tight and forecast loan growth of just 5 per cent this year.
Under these circumstances, home buyers would find it difficult to obtain mortgage financing this year and next, Mr So told an American Chamber of Commerce meeting yesterday.
The tight credit situation might ease if the Hong Kong Mortgage Corp continued to buy mortgage loans from banks, which should have a positive knock-on effect on the property market, he said.
Mr So said growing unemployment - forecast by the Government to hit 4 per cent in the next few months - and lower economic growth would undermine confidence in the market's future performance.
Despite the negative factors, Mr So remained optimistic about the prospects for the residential property market in general.
