bodyType

customContents

entityId

printArticlePageQuery

filter

article

body

urlAlias

articleSectionsContent

articleSeoArticle

articleSourceHeaderArticle

contentSchemaRenderContent

contentSubHeadlineContent

contentHeadlineContent

mainImagePrintArticleArticle

authorBlockPrintArticleArticle

contentSponsorTagContent

articlePianoPaywallContent

scmpYoutubeContent

hooksTrackPageViewArticle

query printArticlePageQuery(
  $entityId: String!
  $customContents: [CustomContentInput]
  $bodyType: BodyFormatTypeEnum
) {
  article(filter: {entityId: $entityId}) {
    entityId
    body(customContents: $customContents, type: $bodyType) {
      json
    }
    urlAlias
    ...articleSectionsContent
    ...articleSeoArticle_3o8td4
    ...articleSourceHeaderArticle
    ...contentSchemaRenderContent
    ...contentSubHeadlineContent
    ...contentHeadlineContent
    ...mainImagePrintArticleArticle
    ...authorBlockPrintArticleArticle
    ...contentSponsorTagContent
    ...articlePianoPaywallContent
    ...scmpYoutubeContent
    ...hooksTrackPageViewArticle
    id
  }
}

fragment articlePianoPaywallContent on Content {
  __isContent: __typename
  ...hooksPaywallPromiseContent
}

fragment articleSectionsContent on Content {
  __isContent: __typename
  sections {
    value {
      ...helpersCheckIfNewsSectionInFirstIndexSection
      ...entityLink
      name
      id
    }
  }
}

fragment articleSeoArticle_3o8td4 on Article {
  ...hooksArticleSeoArticle
  ...helpersCheckIsPostiesArticle
  ...helpersGetArticleTypeArticle
  entityId
  publishedDate
  updatedDate
  summary {
    text
  }
  subHeadline {
    text
  }
  body(customContents: $customContents, type: $bodyType) {
    text
  }
  keywords
  sections {
    value {
      name
      id
    }
  }
  topics {
    name
    entityId
    id
  }
  urlAlias
  authors {
    name
    id
  }
  images {
    style(filter: {style: "768x768"}) {
      url
    }
  }
  readingTime
}

fragment articleSourceHeaderArticle on Article {
  urlAlias
  ...entityLink
}

fragment authorBlockPrintArticleArticle on Article {
  ...defaultArticleDateContent
  ...authorNamesArticle
}

fragment authorNameAuthor on Author {
  ...entityLink
  name
  entityUuid
}

fragment authorNamesArticle on Article {
  authorLocations
  authors {
    entityId
    location
    ...authorNameAuthor
    id
  }
}

fragment blockquoteQuoteContent on Content {
  __isContent: __typename
  ...contentShareWidgetContent
}

fragment checkersCheckContentContainsStarlingImageContent on Content {
  __isContent: __typename
  topics {
    entityId
    id
  }
}

fragment contentHeadlineContent on Content {
  __isContent: __typename
  headline
  socialHeadline
  ...contentHeadlineTagContent
  ...helpersUseContentSponsorContent
}

fragment contentHeadlineTagContent on Content {
  __isContent: __typename
  ...hooksContentHeadlineTagContent
}

fragment contentNewsletterWidgetContent on Content {
  __isContent: __typename
  topics {
    relatedNewsletters {
      ...helpersMassageToNewsletterItemNewsletter
      id
    }
    id
  }
  sections {
    value {
      relatedNewsletters {
        ...helpersMassageToNewsletterItemNewsletter
        id
      }
      id
    }
  }
  ... on Article {
    relatedNewsletters {
      ...helpersMassageToNewsletterItemNewsletter
      id
    }
  }
}

fragment contentSchemaRenderContent on Content {
  __isContent: __typename
  ...blockquoteQuoteContent
  ...imageContent
  ...inlineWidgetContent
  ...photoGalleryWidgetContent
  ...scmpYoutubeContent
}

fragment contentShareWidgetContent on Content {
  __isContent: __typename
  entityId
  urlAlias
  shortUrl
  socialHeadline
  headline
}

fragment contentSponsorTagContent on Content {
  __isContent: __typename
  ...helpersUseContentSponsorContent
}

fragment contentSubHeadlineContent on Content {
  __isContent: __typename
  subHeadline {
    json
  }
  summary {
    json
  }
  ...contentSchemaRenderContent
}

fragment defaultArticleDateContent on Content {
  __isContent: __typename
  ...hooksArticleDateUtilsContent
}

fragment entityLink on BaseWithApplicationAndUrlAlias {
  __isBaseWithApplicationAndUrlAlias: __typename
  __typename
  entityId
  entityUuid
  urlAlias
  urlRedirect {
    toUrl
    id
  }
  application {
    entityId
    id
  }
  ... on Section {
    fullSectionPath {
      entityId
      id
    }
    parentSection
  }
  ...helpersAppBarVariantBase
  ...helpersApplicationBase
  ...helpersCheckIsPlusArticle
  ...helpersStyleSectionContent
}

fragment helpersAppBarVariantBase on BaseWithApplicationAndUrlAlias {
  __isBaseWithApplicationAndUrlAlias: __typename
  ...helpersCheckIsLiveArticle
  ...helpersCheckIsPlusPage
  ...helpersCheckIsPostiesArticle
  ...helpersCheckIsPostiesPage
  ...helpersCheckIsPostMagazineArticle
  ...helpersCheckIsStyleArticle
  ...helpersSectionContent
  ...helpersStyleSectionContent
}

fragment helpersApplicationBase on BaseWithApplicationAndUrlAlias {
  __isBaseWithApplicationAndUrlAlias: __typename
  ...helpersCheckIsPostiesArticle
  ...helpersCheckIsPostiesPage
  ...helpersCheckIsPlusPage
}

fragment helpersCheckIfNewsSectionInFirstIndexSection on Section {
  name
}

fragment helpersCheckIsAmpEnabledArticle on Article {
  entityId
  types {
    value {
      entityId
      id
    }
  }
  sections {
    value {
      entityId
      id
    }
  }
  disableOffPlatformContent
  sponsorType
  published
  ...helpersCheckIsPlusArticle
  ...helpersCheckIsPostiesArticle
}

fragment helpersCheckIsLiveArticle on Article {
  flattenTypeIds
  liveArticle {
    status
    id
  }
}

fragment helpersCheckIsMainTopicContent on Content {
  __isContent: __typename
  topics {
    entityId
    id
  }
}

fragment helpersCheckIsPlusArticle on Content {
  __isContent: __typename
  ... on Article {
    paywallTypes {
      entityUuid
      id
    }
  }
}

fragment helpersCheckIsPlusPage on Page {
  urlAlias
}

fragment helpersCheckIsPostMagazineArticle on Article {
  sections {
    value {
      entityId
      id
    }
  }
}

fragment helpersCheckIsPostiesArticle on Article {
  sections {
    value {
      entityId
      id
    }
  }
}

fragment helpersCheckIsPostiesPage on Page {
  urlAlias
}

fragment helpersCheckIsStyleArticle on Content {
  __isContent: __typename
  sections {
    value {
      entityId
      id
    }
  }
}

fragment helpersGetArticleTypeArticle on Content {
  __isContent: __typename
  ... on Article {
    types {
      value {
        entityId
        id
      }
    }
  }
}

fragment helpersMassageToNewsletterItemNewsletter on Newsletter {
  entityId
  name
  alternativeName
  description {
    text
  }
  summary {
    text
  }
  homepageDescription {
    text
  }
}

fragment helpersSanitizeArticleTypeEntityIdsArticle on Article {
  types {
    value {
      entityId
      id
    }
  }
}

fragment helpersSanitizeAuthorTypesArticle on Article {
  authors {
    types
    id
  }
}

fragment helpersSanitizedAuthorEntityIdsArticle on Article {
  authors {
    entityId
    id
  }
}

fragment helpersSectionContent on Section {
  fullSectionPath {
    entityId
    id
  }
}

fragment helpersStyleSectionContent on Section {
  fullSectionPath {
    entityId
    id
  }
}

fragment helpersUseContentSponsorContent on Content {
  __isContent: __typename
  topics {
    entityId
    sponsor {
      ...sponsorTagSponsor
      name
      type
      id
    }
    id
  }
  ... on Article {
    sponsorType
  }
  ...helpersCheckIsMainTopicContent
}

fragment hooksArticleDateUtilsContent on Content {
  __isContent: __typename
  createdDate
  publishedDate
  updatedDate
}

fragment hooksArticleSeoArticle on Article {
  ...helpersCheckIsPostiesArticle
  ...helpersCheckIsPostMagazineArticle
  ...helpersCheckIsStyleArticle
  ...hooksContentHeadlineTagContent
  ...helpersCheckIsAmpEnabledArticle
  entityId
  headline
  socialHeadline
  types {
    value {
      entityId
      id
    }
  }
  authors {
    entityId
    id
  }
  images {
    generic_og: style(filter: {style: "og_image_scmp_generic"}) {
      url
    }
    styles(filter: {styles: ["og_image_posties_article", "og_postmag", "og_image_style", "og_image_scmp_analysis", "og_image_scmp_explainer", "og_image_scmp_editorial", "og_image_scmp_fact_check", "og_image_scmp_debate", "og_image_scmp_live", "og_image_scmp_obituary", "og_image_scmp_opinion", "og_image_scmp_review", "og_image_scmp_series", "og_image_scmp_generic"]}) {
      url
      style
    }
    type
  }
  urlAlias
}

fragment hooksContentHeadlineTagContent on Content {
  __isContent: __typename
  __typename
  ... on Article {
    types {
      value {
        name
        entityId
        description {
          text
        }
        id
      }
    }
    ...helpersCheckIsStyleArticle
  }
  flag
  sections {
    value {
      name
      id
    }
  }
  ...hooksContentHelperContent
}

fragment hooksContentHelperContent on Content {
  __isContent: __typename
  ...helpersSanitizeArticleTypeEntityIdsArticle
  ...helpersSanitizeAuthorTypesArticle
  ...helpersSanitizedAuthorEntityIdsArticle
  flag
}

fragment hooksPaywallPromiseContent on Content {
  __isContent: __typename
  entityId
  ...helpersCheckIsPostiesArticle
}

fragment hooksTrackPageViewArticle on Article {
  entityId
  publishedDate
  headline
  sections {
    value {
      name
      id
    }
  }
  urlAlias
  authors {
    name
    id
  }
  entityUuid
}

fragment imageContent on Content {
  __isContent: __typename
  headline
  ...checkersCheckContentContainsStarlingImageContent
}

fragment inlineWidgetContent on Content {
  __isContent: __typename
  ...contentNewsletterWidgetContent
}

fragment mainImagePrintArticleArticle on Article {
  images {
    title
    url
    isSlideshow
    size_652x446: style(filter: {style: "652x446"}) {
      url
    }
  }
}

fragment photoGalleryDialogContent on Content {
  __isContent: __typename
  __typename
  ...contentShareWidgetContent
}

fragment photoGalleryWidgetContent on Content {
  __isContent: __typename
  ...photoGalleryDialogContent
}

fragment scmpYoutubeContent on Content {
  __isContent: __typename
  entityId
  urlAlias
  publishedDate
}

fragment sponsorTagSponsor on Sponsor {
  name
  type
  images {
    url
  }
}


sections

types

disableOffPlatformContent

sponsorType

published

headline

socialHeadline

authors

images

publishedDate

updatedDate

summary

subHeadline

keywords

topics

readingTime

authorLocations

entityUuid

Nicholas Spiro

What a difference several months make. As recently as last autumn, many analysts and commentators were still talking up the resilience of Hong Kong’s residential property market, with prices for homes hitting a record high in August despite a succession of domestic and external shocks.
Even when prices began to fall towards the end of last year, the consensus view was that home values – which increased 3.6 per cent in 2021 – would continue to rise this year. In early January, JPMorgan predicted the city’s property market would shrug off renewed pandemic-induced restrictions and the prospect of higher mortgage rates.
Three months on, sentiment has become distinctly pessimistic. Prices have continued to drop and are down almost 7 per cent from their peak last August, according to an index produced by Centaline Property Agency.
The combination of the disruption wrought by the government’s draconian response to the surge in Covid-19 cases and the uptick in mortgage rates stemming from the knock-on effects of a sharper-than-expected tightening in US monetary policy has darkened the outlook for Hong Kong’s property market.
Transaction volumes have fallen steeply this year, falling to 2,869 in March. That is down from 5,409 as recently as October last year and a 61.5 per cent drop year on year, according to data from the city’s Land Registry.
Why Hong Kong home renters will pay more in 2022
In early March, Cushman & Wakefield noted that prices at City One Shatin in Sha Tin, a proxy for the mass market, were down 5.2 per cent compared with the corresponding period in the previous quarter.
In a report published on March 28, Goldman Sachs went so far as to predict a 20 per cent decline in prices in the next four years. That would push the city’s property sector into a bear market.
Saying it saw a “lower for longer price environment” amid a more severe pandemic-induced slowdown and rising borrowing costs, Goldman Sachs said the drop would be “enough to compensate” for the rise in mortgage rates as it would restore affordability, along with an anticipated rise in household income by 2024.
Yet, what was conspicuously absent from the bank’s report was an acknowledgement of the importance of Hong Kong’s severely constrained housing supply. This is the key factor that has propped up prices in the face of successive blows to demand.


Ever since the long bear market between October 1997 and August 2003, supply has lagged woefully behind demand. This resulted in shortfalls in completions and exposed major flaws in the development process.
Any prediction of a sharp, sustained fall in prices looks implausible when taking into account persistent impediments to boosting supply. For a reality check for those anticipating a major correction, look no further than a series of hard-hitting reports on the city’s housing policy published by Our Hong Kong Foundation, a think tank established by former chief executive Tung Chee-hwa.
Hong Kong nano flats sales ebb as buyers shift focus to bigger homes
For the past several years, the foundation has warned of the severity and consequences of the crisis in the territory’s housing market, still far and away the world’s least affordable. The median price of a home in Hong Kong is a staggering 23.2 times the annual median household income, according to the latest housing affordability survey published by Demographia last month.
The crux of the problem, the foundation has repeatedly stressed, is the lack of large-scale land development over the past two decades. This has created a chronic backlog of housing need that has contributed to overly optimistic targets and undermined the credibility of the government’s housing policy.


In its latest report, published in January, the foundation noted that the government still “owes” Hongkongers 20,000 private and 100,000 public housing units, on top of the 180,000 units expected to be completed by 2025.
The shortfall, moreover, is exacerbated by governance and administrative failings throughout the development cycle, notably lengthy vetting and approval procedures that drag out the development period of large-scale projects.
Ryan Ip, head of land and housing research at Our Hong Kong Foundation, said “piecemeal solutions won’t work”. Nothing less than a major overhaul of the development process is required to meaningfully boost supply. Hong Kong should also take a leaf out of Singapore’s book and use more developable land to build affordable housing.
In the absence of a sharp increase in supply in the coming years – or at least a credible plan to ramp up completions within the next three years – it is hard to see house prices falling into bear market territory. With the Hang Seng Index – which is traditionally strongly correlated with property prices – having staged a recovery since mid-March and a sharp drop in the number of daily Covid-19 infections, sentiment could turn more positive in the coming weeks and months.
While it is understandable that views on the future direction of house prices in Hong Kong differ given mounting economic uncertainty, the prospect of persistent undersupply cautions against extremely bearish scenarios.
In a report published last December, Morgan Stanley said supply was the most potent tool to tame rising property prices and make homes affordable to all. With home values in Hong Kong having defied successive shocks, this seems like the most sensible view.
Nicholas Spiro is a partner at Lauressa Advisory


Expect a sharp, sustained drop in Hong Kong housing prices? Think again

Lohas Park in Tseung Kwan O. In the absence of a sharp increase in supply in the coming years, it is unlikely housing prices will fall into bear market territory any time soon.  Photo: Sun Yeung

Opinion

Comment

Business

Hong Kong

News


Despite a pessimistic turn in sentiment, the underlying factors that have made Hong Kong’s housing market the world’s most expensive have not changed
Any prediction of a residential property bear market looks implausible when taking into account persistent impediments to boosting housing supply



The underlying factors that have made Hong Kong’s housing market the world’s most expensive have not changed. Any prediction of a residential property bear market looks implausible when taking into account persistent impediments to boosting housing supply.


Hong Kong housing

Hong Kong property

Hong Kong economy

The View

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Column

The View | Expect a sharp, sustained drop in Hong Kong housing prices? Think again

Despite a pessimistic turn in sentiment, the underlying factors that have made Hong Kong’s housing market the world’s most expensive have not changed Any prediction of a residential property bear market looks implausible when taking into account persistent impediments to boosting housing supply