Citibank expects Hong Kong property prices to fall another 10 per cent, bottom out in second quarter of 2023
- Property prices to fall another 10 per cent from October to the second quarter of 2023, bank says
- Rising interest rates are the ‘biggest negative factor’ affecting market, executive says
The bank, the first to make a clear-cut forecast, said property prices will fall another 10 per cent from October to the second quarter of 2023.
Citibank is not alone in forecasting a decline in property prices. Last month, Goldman Sachs forecast a 30 per cent decline in overall home prices in the city over two years, while DBS said it expected a 5 per cent drop in 2023. Morgan Stanley, HSBC, JLL and Colliers have all predicted lower prices recently.
Despite the continued downside potential of local home prices, Lee said she hoped that the relaxation of current cooling measures might stimulate new demand and an excessive correction of Hong Kong’s property market might be avoided.
There is a chance that the Hong Kong government will relax a 15 per cent ad valorem stamp duty on the purchase price of a second residential property in the budget to be announced next year, Citibank said. This would stimulate demand for home ownership and avoid the emergence of negative equity, it said.