The property market climate index estimates the potential decline

Recently, the property market has reported that the second-hand building price or the new building price reduction is fast-changing. It seems that the atmosphere of the property market is extremely cold. Is this the case? Let us follow up on the latest changes in the Hong Kong property market sentiment index.

Through all the news newspapers in Hong Kong, the author counts the frequency of “positive” and “negative” words on the title and content of the local property market. For example, the “price” and “price reduction” of the content of the report are negative words. Conversely, the “price increase” and “anti-price” are positive words, and the Hong Kong property market prosperity index (hereinafter referred to as the prosperity) is compiled. index). The rising prosperity index represents a positive and hot atmosphere in the property market; on the contrary, it is pessimistic and bearish.

As can be seen from the figure, the prosperity index has peaked since the end of May this year (see the top of the property market for about 3 months), and the decline has not yet shown signs of asthma. As of December 18, the prosperity index has been rushed to a new low of about -162 points in the past 30 months, reflecting that the property market is indeed extremely cold [Figure]. In addition, it is worth noting that, according to the relationship between the property market index and the property price changes after the financial tsunami, the former has fallen to the current low level, which often means that the property price will fall to zero level or lower according to the annual change (ie Recorded year-on-year decline).

If the year-on-year change in property prices in the next year falls back to the level of -10% in 2016 (note: the property price in 2009 will change by up to -18% year-on-year), and the assumption that the property price index will remain unchanged last year, It means that the property price is from the current level, and there is a potential decline of about 16% in 2019. From the historical high, the property price will fall by about 21% from the high level, which is roughly in line with the earlier analysis of the author (see October 25, 2018 [Along the map], “How much does the property price “minimum” fall?”) .