Hong Kong tycoon forecasts further 10pc drop in property prices before hitting bottom at year’s end
Henry Cheng expects the government to relax current cooling measures if house prices fell to ‘a certain extent’
Real estate tycoon Henry Cheng Kar-shun has predicted that Hong Kong property prices will drop another 10 per cent before hitting bottom at year’s end.
His estimate echoed the forecast of Lee Shau-kee – the city’s second richest man – who said earlier that house prices could fall another 10 per cent from the current level.
Despite the modest recovery of prices in April, the chairman of New World Development , which has a total asset value of more than HK$300 billion, said he expected the downtrend could come to an end later this year.
“I think prices will fall at most 10 per cent this year,” the business tycoon said, adding the property market could “almost” see a bottom after a 10 per cent drop.
According to government data, home prices have fallen 10.78 per cent from their September 2015 peak. But the general price index for private homes rose 0.7 per cent month on month to 273.1 in April. This was the first uptick after a six-month decline.
Cheng said house prices had their ups and downs and the slight recovery in April might not last, though he said fluctuations in property prices would not affect his firm’s land purchasing strategies.
The tycoon expected the government to relax the current cooling measures if house prices fell to “a certain extent”. He said: “Clearly the government does not think prices have reached such a level.”
He urged the government to curb the cooling measures earlier this year, according to media reports.
“The government will not make frequent changes in policies,” Cheng said, suggesting the government should adjust house supply as a way to stabilise prices, which he considered “the most healthy and natural approach”.
