Citibank survey shows Hongkongers less optimistic about home price rises, points to downward adjustment

Citi Residential Property Ownership Survey finds fewer people expecting property prices to rise than in the second quarter

Drop in property prices a ‘very minor adjustment’, Knight Frank executive says, expects prices to rise by 5 per cent next year

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The Hong Kong property market remains supported by positive structural factors, including a shortage of housing supply and long-term economic growth, according to Citibank. Photo: Sun Yeung

Published: 8:30am, 12 Nov 2021Updated: 9:45am, 12 Nov 2021

Hong Kong home prices might see a downward adjustment after peaking in August, as fewer Hongkongers remained optimistic about price rises in the coming year, according to a Citibank survey.

The number of people who expected property prices to rise further had fallen to 38 per cent in the third quarter from 54 per cent in the previous three-month period, according to the Citi Residential Property Ownership Survey released on Thursday. The figure was, however, still higher than previous year’s result of 23 per cent in the same period.

“For the overall housing market, we expect home prices to have peaked in 2021 August, and [it] is potentially subject to a 7 to 10 per cent downside until 2022 June,” said Josephine Lee, head of retail banking at Citi Hong Kong, adding that factors such as front-loaded future demand, stock market corrections that affect home buying sentiment and policy risk concerns were to blame.

The ownership survey has been running since 2010 based a random sample of more than 500 Hong Kong respondents collected by the University of Hong Kong Social Sciences Research Centre in September.

The drop in the third quarter was due to prospective homeowners entering the market earlier in the first half of 2021, Lee said. Buyers were being optimistic about an economic recovery in Hong Kong, as well as a relative easing in the city’s Covid-19 outbreak, she added.

“This leads to the housing market being more quiet for the next 12 months. So in this quarter, it is reasonable for less respondents to expect the property price to rise ,” she said.