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Hong Kong property
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Hong Kong housing market is likely to start the Year of the Tiger with a purr rather than a roar, say analysts

  • The omicron strain of coronavirus and the spectre of interest rate increases may dampen sentiment in the early stages of the Lunar New Year
  • The Year of the Ox was as strong as its name suggests when it came to sales of second-hand homes

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A sales office for flats at four residential development projects at Mira Place One in Tsim Sha Tsui. Photo: Xiaomei Chen
Lam Ka-sing
The Year of the Tiger does not herald a roaring start for Hong Kong’s housing market, according to analysts.
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The omicron strain of coronavirus currently plaguing the city and the spectre of interest rate increases are likely to dampen sentiment in the early stages of the Lunar New Year.

The ­Centa-City Leading Index (CCL), a gauge of lived-in home prices compiled by Centaline Property Agency, will fall about 2.1 per cent by the end of February, said Wong Leung-sing, senior associate director of research at Centaline.

“The impact on local housing prices, from the January 27 US Federal Reserve hint of an interest-rate increase in March, and the government’s extension of social distancing measures to February 17, will only be reflected in the CCL in late February,” he said.

The index rose 5.3 per cent in the Year of the Ox, to 185.93, as sales of second-hand homes soared. Wong’s prediction would mean the index will fall to as low as 182 in late February.

“The Year of the Tiger is approaching,” he said. “Looking forward to the seasonal boom after the Chinese New Year, housing prices will hopefully resume their upwards trajectory after the adjustment and regain lost ground in the Autumn, around Mid-Autumn Festival.”
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Wong’s view is echoed by Derek Chan, head of research at Ricacorp Properties. Home prices may fall 2 to 3 per cent between January and March, before a possible recovery after the pandemic eases, he said.

Chan is optimistic about the Year of the Tiger as a whole, however, forecasting an 8 to 10 per cent gain in home prices for the full year, driven by the shortage of housing and a slower pace of interest rate rises in Hong Kong.

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