Brace for up to 20 per cent decline in Hong Kong home prices, CK Asset senior director says
- Home prices could drop by up to 20 per cent in the next 22 months, as outlook darkens, says CK Asset executive director Justin Chiu
- Expect builders to slash new home prices along with the sliding market, he says
Hong Kong home prices could be headed for a multi-year downtrend that knocks valuations by up to 20 per cent, prompting major developers to slash prices for new homes along with the sliding market, according to a senior executive at CK Asset Holdings, the second largest developer in Hong Kong by capitalisation.
CK Asset executive director Justin Chiu Kwok-hung said on Tuesday that home prices could drop 10 per cent this year and by up to 8 to 10 per cent next year, amid simmering trade tensions between China and the US that show little sign of being resolved in the near future.
“We will adjust our selling prices if the property market is heading to a downtrend. But our projects would still have to make a profit as the sites were bought at lower cost years ago,” Chiu said. “Home prices will need to return to the level of end 2016 and early 2017 before the general public can afford to own a home.”
Hong Kong home prices dropped about 9 per cent from the peak in July last year to December, according to data released by the Rating and Valuation Department. For the whole of 2018, home prices grew 1.6 per cent, though the increase was the smallest annual growth in 10 years.
Donald Cheung, executive director of property developer Emperor International, said he expected home prices to drop a further 10 to 15 per cent.