Hong Kong property market adjustment is short-lived
Property prices in Hong Kong fell for four months. In November last year, the overall price of private homes plummeted by 3.5% month-on-month, the largest monthly decline in nearly 10 years. However, in recent days, there is a big reason that the decline in property prices will end this season. JPMorgan Chase issued a report saying that the property price adjustment period is short. I believe that the second quarter of this year will start to recover. It is expected that the Central Plains City Leading Index will fall 15% from the high in August last year to the second quarter of this year. The year is flat.
Motong stressed that property prices are only one indicator of the stock price trend of real estate stocks. Other indicators include the volume of property transactions, and the developer’s corporate capital management and US interest rate changes are also important factors.
Proposed to enter the market to set a new world
The bank said that it will prefer developers more than rent-taking shares this year. It is recommended to “overweight" Xinhe Real Estate (00083), Cheung Kong Group (01113), New World Development (00017), Wheelock (00020), and Wharf ( 00004), Hang Lung Properties (00101). Sun Hung Kai Properties (00016)’s share price performance was lower than its peers, and its rating was adjusted to “Reduce”. The target price was reduced from RMB 129.1 to RMB 110. The price of Swire Properties (01972) has already reflected the increase in dividends and the rating has been adjusted to “Neutral”. The target price dropped from 31.4 yuan to 28.1 yuan.
For office space, Morton expects that the rental level of office space in Central will be flat year-on-year. The rents in Causeway Bay and Wan Chai Commercial Building are expected to increase by 5%. The rent of office buildings in Kowloon East will fall by 5%. In addition, retail store rents should increase by 5%.
Citigroup recently predicted that property prices will fall from 10% to 15% from August last year to March this year. It is expected to bottom out at the end of March. When the transaction recovers, it will push up property prices, and April-December property prices will rise. Should rise by 10%, the annual property price can increase by 5%.