Hong Kong’s homes may set price record in one or two months as property buyers shrug aside talk of emigration, JPMorgan says
- Number of people selling properties is far smaller than the number of people buying them, US bank executive says
- Chances of setting record are very high, as home prices are ‘just 1 per cent to 2 per cent from their peak’
US investment bank JPMorgan said emigration has had little effect on Hong Kong’s property market, and that home prices were on course to set a record in a month or two’s time.
“The chances of breaking the record are very high, because [home prices are] just 1 per cent to 2 per cent from their peak,” said Cusson Leung, head of Asia property research at JPMorgan. Leung also said he expected prices will rise 5 per cent to 10 per cent this year.
Home prices and transaction volumes have kept rising, even if the wave of emigration was real, Leung said. He questioned the impact of emigration on the market and wondered whether the people said to be leaving owned homes, and how many would actually sell their properties.
“This proves that the number of people selling properties is far smaller than the number of people buying properties,” he added.
The US bank is not alone in expecting an increase in Hong Kong home prices.
These prices will reach a new high in the fourth quarter, said Hannah Jeong, head of valuation and advisory services at Colliers International. “The demand is very, very strong due to the low interest rate [environment] and the ample money in the market,” she said. “Unfortunately, home seekers might have already missed the golden window for snapping up a cheaper home, seen late last year.”
A price index compiled by the city’s Rating and Valuation Department shows mass lived-in homes measuring less than 431 sq ft had already set a price record in May of 439.9. An overall index shows that in May this year a five-month rally in home prices stood just 0.8 per cent shy of the 2019 peak. The rally came after a brief slump because of the coronavirus outbreak last year.
The average price for lived-in homes rose to a new high of HK$9.07 million (US$1.2 million) in the first half of this year, the highest since records began in 1996, according to Ricacorp Properties. It smashed the previous record of HK$8.99 million set in the first half of 2019 along the way.