Hong Kong’s property market has 10 more years in its bull run as population inflow from Greater Bay gives it sustenance
- Hong Kong’s median home prices will keep spiralling upwards for the next 10 years because demand for abodes will outpace supply in the city, UBS said
- The world’s most expensive urban centre will face an annual shortage of about 15,000 homes, UBS said
Hong Kong’s property bull market has another 10 years to run, as housing supply fails to keep up with the new population pouring in from the Greater Bay Area, said the Swiss bank UBS, which correctly picked the bottom in the city’s short-lived price correction last year.
Home prices will continue spiralling upwards as buyers compete to get their hands on residential property, according to the bank’s real estate research team, led by John Lam. Hong Kong’s annual housing stock is estimated at 45,000 homes a year, 25 per cent short of UBS’ calculation.
“Our analysis based on demographics and non-local demand suggests annual housing demand would stand at 60,000 units,” Lam said. The Greater Bay Area, a cluster of 11 southern Chinese cities including Hong Kong and Macau, “should enhance integration [within] the area through improving software and hardware, lowering transaction costs and boosting economic activity. We believe this will benefit Hong Kong property.”
UBS isn’t alone with the bullish forecast. Moody’s Investors Service said Hong Kong’s home prices would rise between 8 per cent and 10 per cent over the next 12 to 18 months, revising its earlier estimates of a drop of up to 15 per cent, with its vice-president Stephanie Lau predicting median home price to surpass its July 2018 record.