Hong Kong’s property prices to fall by up to 20 per cent as the city’s jobless ranks swell amid Covid-19 pandemic
- While JLL expects housing prices to drop by 10 to 15 per cent this year, Cushman & Wakefield sees falls of up to 20 per cent as rising unemployment in the city hits demand
- Greater job insecurity will decrease desire among prospective homebuyers, says Cushman and Wakefield’s Alva To
The Covid-19 pandemic, which has pushed Hong Kong’s unemployment rate to a nine-year high, will put further pressure on housing prices in the city after they took a hit from the social unrest last year, according to market observers.
“As recession in Hong Kong deepens, higher unemployment will likely erode housing demand as some prospective buyers retreat, while more owners may choose to sell, tilting the market dynamics to favour buyers more,” said Nelson Wong, head of research at JLL in Greater China.
“We continue to expect home prices to fall by 10 to 15 per cent in 2020. The downside risks appear higher, given uncertainties about the duration of the outbreak,” he added.
More than 134,000 people have lost their jobs, pushing the city’s unemployment rate to 3.7 per cent in February, the highest level since 2011, according to the Census and Statistics Department. The city’s jobless rate has increased for five consecutive months.
The retail, accommodation and food services sectors were hit the hardest, with the jobless rate rising to 6.1 per cent from 3.4 per cent a year earlier, as a result of the social unrest in the second half of last year and the ongoing Covid-19 outbreak.