First sign of relief as analysts forecast Hong Kong’s residential property fever to break in second half
Property analysts warn of rising headwinds that will spur a wave of deflation for the city’s property market in the second half
Hong Kong’s runaway home prices may finally see some cooling in the second half, according to analysts.
Residential home prices are likely to drop 7 per cent in the July to December period, as new supply launches and a downbeat stock market weigh on confidence, according to Citibank, the first major financial institution to call for the onset of a correction this year.
However, it is not clear whether prices will end up in negative territory for the year, as home prices rocketed 13 per cent in the first half, outpacing Citi’s expectation for a 10 per cent rise.
“Any major Hong Kong stock market correction could also kick-off a home price correction in the second half,” said Ken Yeung, a property analyst for Citi, in a report released early this week. “The summer holidays mark the start of a traditionally low season for transaction volumes. With home prices up 47 per cent since their low in March 2016 and more new launches expected in the second half of 2018, homeowners could be increasingly tempted to lock in the huge gains clocked over the past few years.”
Prudential Brokerage associate director Alvin Cheung Chi-wai also cautioned of a trend change in real estate.