Hong Kong developer Wheelock sees cloudy second half as rate rise and trade war ripple through market
The company sold a record number of homes in the first half of the year
Hong Kong property developer Wheelock and Co expects headwinds in the second half as a sluggish stock market, rising interest rates and uncertainties from the US-China trade war bite, after it reported record sales of properties in the first six months.
The company rode a boom in the city’s property market in the first half of the year, with 2,021 residential units sold or pre-sold, translating into sales revenue of a record HK$23.4 billion (US$3 billion), more than double the figure in the same period last year.
However the company warned of clouds over the second half of the year.
“We’ve already seen the downbeat stock market impacted by uncertainties, including the further interest rate increase and the US-China trade war,” said Douglas Woo Chun-kuen, the company’s chairman and managing director. “They will also add pressure onto the property market.”
The median house price in Hong Kong had risen for 27 consecutive months until July in what is already one of the most expensive cities to own a home. But UBS has predicted prices will tumble as much as 10 per cent from this month to the end of 2019, while Citibank has forecast a 7 per cent fall in the second half this year.
Woo said that in such an environment, the company would be more selective when taking part in land bidding in the coming half year.