Hong Kong property market outlook in 2019
Since 2009, the prices of residential properties in Hong Kong have hit record highs. Some members of the public have been forced to take advantage of their homes to take up their luck. The latest phase of HOS flats has received multiple applications. The problem of land and housing in Hong Kong has existed for many years, especially the development of public housing. Regardless of whether they live in public housing or general private properties, the per capita living space in Hong Kong is much lower than in other cities. The fact that Hong Kong people live in a small environment is an ironclad fact. Insufficient housing supply in Hong Kong, private property prices have risen to a level that is unaffordable to the general public, and the shortage of public housing is a true portrayal of housing problems in Hong Kong.
The Chief Executive’s “Policy Report" focuses on the housing policy and is committed to establishing a home ownership ladder. In recent years, the property market is still hot, but banks’ interest rate hikes, stock market volatility and “China-US trade war" and other factors have been moving around the market in recent months. As far as the residential market in Hong Kong is concerned, I expect the property price to rise by 6% to 7% in 2018; the total residential sales in 2017 is about 58,000 to 60,000, estimated to be about 58,000 in 2018, 2019 and 2017. Similar, still low. At present, the market is dominated by first-hand buildings. Buyers are mainly self-occupied. As long as the price of the first-hand building is attractive and offers preferential treatment to buyers, most buyers tend to be single-handed. The author predicts that the proportion of first-hand transactions in 2018 will remain 30% or more, and the transaction amount will account for about half.
For the future supply, small and medium-sized units will dominate the market. At present, the residential units below 400 square feet in Hong Kong account for 31% of the total. In 2018-2022, about 36% of the newly completed units are less than 400 square feet. The “nano-rises" below 200 square meters account for about 4%.
Hong Kong is an open and small economy that is highly vulnerable to external factors. If property prices fall sharply, it will pose a potential risk to the financial system. Stress tests show that individual small banks have weaker ability to cope with extreme environments. The loss of funds is relatively sensitive, and regulators must be vigilant in the face of the risk of property price adjustments. In addition, the economy and finance of Hong Kong and China are increasingly integrated. If the Chinese economy slows down, it will affect the Hong Kong economy and the property market. With the subtle changes in China-Hong Kong economic relations, Hong Kong’s role as the main external window of the Mainland is likely to change.
The current situation of the property market in Hong Kong is not a problem that has occurred in a moment. The previous Government has been more active in launching new land. However, the Government is not thorough enough to convey the future supply of the property market in Hong Kong. It is impossible to establish the public’s expectations of the property market. . In the short term, the construction costs in Hong Kong continue to be high and the demand is still there. I believe that the property prices in Hong Kong are being adjusted, but they will not fall like the “cliff style" in 1997.
It is estimated that the property price adjustment will be more in the next three to four months, but the performance of first-hand housing will be better, second-hand and HOS flats will be relatively quiet, and there will be room for bargaining. In addition, whether it is construction, completion or pre-sales, there are fewer, especially Christmas and New Year holidays. Whether there is “Xiaoyangchun" before and after the Lunar New Year depends on Sino-US relations and stock market performance. However, the current opportunity to see “Xiaoyangchun" is not large. It is estimated that the amount will increase but the price will be flat. The author expects that under the new government policy, there will be fewer residential transactions, and some eligible citizens are waiting for the “funded housing lottery". Regardless of whether there is a “vacant tax", it is estimated that developers will still push “delivery". The market is still dominated by the first floor, but it is believed that it will not affect the pace of selling of developers. The developer’s strategy of selling flats is that the New Territories and the multi-supply areas will use “goods such as revolving" to sell flats. The pricing will be more “sticking". In traditional luxury residential areas such as Hong Kong Island, the developers will be reluctant to sell because of the lack of supply in the future. “."
The property market is undergoing an adjustment period. The author expects that the residential property market will “slow first and then stabilize” in 2019, a decline of about 10%. It is expected that the residential property prices will still be adjusted in the next 12 to 18 months. In the short term, the impact on Hong Kong’s residential property market will be government policies, as well as peripheral economic and political factors, especially Sino-US trade relations. These two factors are more important, followed by interest rate hikes and residential supply. However, in the current situation, we cannot see that there are any major factors that have caused property prices to fall sharply in the short term. Even if property prices fall by 10% to 20%, it will not have a major impact on the overall property market and the banking system.