Hong Kong property prices are likely to fall across the board in 2020, industry insiders say
- Luxury homes and high-street shops are to bear the brunt, according to poll conducted by South China Morning Post
- Prices of luxury homes to fall by 20 per cent, while rents for high-street shops to fall by 10 per cent to 30 per cent
The respondents included property consultants JLL, Knight Frank, Colliers International, CBRE and Cushman and Wakefield, property agents Centaline Property Agency, Midland Realty and Ricacorp Properties, property developers such as Sun Hung Kai Properties (SHKP), Sino Land, Henderson Land Development, Lai Sun Development, as well as financial services firm CGS-CIMB Securities and Maggie Hu, an assistant professor of real estate and finance at Chinese University.
JLL, Knight Frank, Colliers, Cushman, Centaline, Lai Sun, Empire Group and CGS-CIMB said home prices will fall. Midland Realty and Ricacrop, meanwhile, said they will rise 5 per cent to 10 per cent. SHKP, Sino Land and Henderson Land said they would be stable, and Maggie Hu said home prices will stay flat.
Eight out of 14 respondents, or 57 per cent, said they expected the prices of general housing to fall 15 per cent, with one predicting luxury homes to drop by 20 per cent. US commercial real-estate services and investment firm CBRE does not cover the residential sector.
“The longest bull market in the Hong Kong property sector’s history came to an end in the second half of 2019, because of the local social movement and economic uncertainties,” said Joseph Tsang, chairman of US commercial real-estate services firm JLL in Hong Kong. The company, the most bearish of the respondents, expected luxury home prices, office rents and high-street shop rents to fall by up to 20 per cent, and by as much as 15 per cent for general home prices.
The value of Hong Kong homes has rocketed by 544 per cent from its lowest in July 2003, when the city was gripped by the Sars (severe acute respiratory syndrome) outbreak. Home prices then fell by as much as 17 per cent in the second half of 2008 because of the global financial crisis, but property values started rebounding at the beginning of 2009, rising 25.7 per cent that year. And this rising trend continued until June this year.