Has the Hong Kong property market entered the down cycle?

The government said that because it has not been able to determine whether the property market has entered the down cycle, it will not withdraw the hot spot to curb the property market at this stage. Some people in the industry expressed disappointment; but I am not surprised by the performance of the government. The government has always been cautious in doing things, often in order to avoid making mistakes, and try not to make judgments too early. The impression of being unresponsive is often given.

However, most people in the industry believe that whether it is based on basic analysis or chart trend, the property market has entered the down cycle.

From the perspective of basic analysis, the game between China and the United States has entered a state of cold war. The differences between the two countries cannot be reconciled in the short term. The situation of tension and instability will continue for several years. Such an environment is not conducive to real estate investment. In the future, funds will be selected for the more flexible liquidity of the stock market, bonds and commodity futures markets.

On the other hand, the political confrontation between China and the United States will inevitably spread to the economic field; in addition to affecting import and export trade, the front line will also expand to the financial market and the foreign exchange market, and even academic exchanges may be interrupted. In addition to being shot by the United States, the United States also woos allies in the world and also restricts China in all directions. Therefore, it is not only China and the United States that have problems, but the world will be dragged down. For this reason, the International Monetary Fund has comprehensively lowered the estimate of GDP growth in the coming years. The performance of the property market is unlikely to run counter to economic growth. If the economy goes down, the property market will have to follow. Moreover, since the recovery of the property market in Hong Kong in 2003, it has risen for 15 years and has overdrafted a lot of good prospects. Therefore, without the economy really entering the recession, as long as the economic performance is not as good as expected, it will also disappoint many investors. Some of them will definitely re-adjust their investment and form pressure on the real estate market.

In addition, the government has made great determination to solve the housing problem. The goal is to increase supply and stabilize property prices. Although this goal is difficult to achieve in one step, it will certainly achieve results, and investors will have to change their expectations for the future. The current supply of buildings has more than doubled compared with the low age. The situation of short supply is gradually resolved.

From the perspective of technical analysis of chart trends, the leading index of the Central Plains city has fallen for 12 consecutive weeks, although the decline is only about 6%, but the trend is very obvious. In terms of the distribution of transactions in the market, the proportion of low-price transactions is increasing, and the transactions that can maintain high prices are decreasing. What is constantly emerging in the market is the low turnover of innovations, and the high turnover has not been seen for a long time. These circumstances show that low-priced transactions are the most iconic transactions at present, and have a greater leading role in the market outlook.

Recently, the first-hand real estate sold well, the price is more than 20% higher than expected, but the second-hand market has only dropped 6%; so I believe that the decline in the second-hand market will further expand, so that the decline in the second-hand market can be followed. The decline in the primary market.

In addition to the price decline in the current property market, the shrinking volume has become even more alarming. At the peak, the Land Registry’s monthly registration of sale and purchase contracts can be close to 20,000, but it has recently fallen to only 5,000 per month, only a quarter of the peak period. Even in those housing estates that have been more active in trading, there are at least 10 or 20 transactions per month, but they have recently fallen to only two or three per month. This situation has only occurred during the SARS period, and the situation is unusual. This silence makes people feel that a huge storm is coming. I personally believe that the property market has entered the down cycle.