Hong Kong home prices: worst yet to come, with up to 30 per cent slump a possibility as market enters decline
- Will not be surprised if prices come down by 20 or 30 per cent, JLL chairman tells 2022 SCMP China Conference
- Hong Kong’s prime rate set to revisit 2005 to 2007 levels of 7 to 8 per cent next year, Bloomberg Intelligence analyst says
The worst is yet to come for Hong Kong home prices, with the market at the start of a decline amid interest rate rises and economic slowdown, the 2022 SCMP China Conference heard on Thursday.
With the market at the start of a downwards cycle, home prices will drop 5 to 10 per cent this year, said Joseph Tsang, chairman at JLL Hong Kong.
“Hong Kong [has] enjoyed roughly around 20 years of a rising market, ever since 2003, after [the outbreak of] Sars [Severe acute respiratory syndrome]. And Hong Kong pricing has been … up to the peak,” he said. “Hong Kong is probably the most expensive city to live in. So I won’t be surprised to see if the prices come down by 20, 30 per cent.”
The theme for the conference, an annual event hosted by the Post, was “Where does Hong Kong stand 25 years after the handover?”
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Hong Kong’s Finance chief on property market and city’s new Strategic Tech Fund
The Hong Kong Monetary Authority this week raised the city’s borrowing cost by 75-basis points for a second consecutive month, in lockstep with an increase of the same margin overnight by the US Federal Reserve. Mortgage payments linked to the Hong Kong interbank offered rate (Hibor) have been rising since March, following the first rate increases in the US.