After six months of social events in Hong Kong, the property market has not seen a sharp decline, but only a slight adjustment
The situation of the Hong Kong property market mainly depends on the macroeconomic environment and the unemployment rate. Unemployment has not risen sharply. Most citizens are still working and still able to afford mortgage contributions. Therefore, the adjustment of the real estate market is quite limited.
In the short term, the author expects the property price to bottom out after an adjustment of about 10%, but there may not be suitable conditions to trigger an immediate price rebound
It is estimated that the property price needs to be consolidated for a period of time to accumulate sufficient momentum to recover. Therefore, the author believes that after the adjustment of 2020, it bottomed out, but there may not be suitable conditions to trigger an immediate price rebound. It is estimated that the property price needs to be consolidated for a period of time before it can accumulate sufficient momentum to recover. Therefore, the author believes that the property price will decline slightly in the year of 20th, and will increase slowly towards the end of the year after stabilizing. The whole of the year of 2020 may be higher than the level in 2019, but the gap is not large. The reason is that local property prices are too high. Moreover, because mainland investors are wary of Hong Kong, they may not be able to reinvest their funds in Hong Kong.
The trend of rents is different
The changes in rents in Hong Kong often lag behind fluctuations in property prices: if the price of a property rises sharply, the rent will slowly catch up; on the contrary, when the price of a property falls, the rent may not follow the adjustment. However, the author believes that rents in 2020 will show quite significant volatility. At present, rents are also adjusted downwards with property prices. This may continue until the beginning of 2020, and it is estimated that it will stabilize afterwards. However, the influence of mainland students who come to study in Hong Kong on the rental market cannot be underestimated. Most of these students take self-financed master’s programs and need to rent housing off-campus, which is a major source of customers in the local rental market. The number should not be ignored.
However, recent social events have adversely affected the admission of such courses in the Mainland, and the number of mainland students enrolled in local universities has plummeted. It is expected that until the summer of 2020 or even September, those owners who are accustomed to renting their units to mainland students may consider reducing prices due to the decrease in the number of customers, which will bring downward pressure on overall rents in the third quarter of 2020. The author speculates that rents will soften in the first quarter of 2000, stabilize in the second quarter, and decline again in the third quarter.
In summary, the overall economy of Hong Kong will show a slight negative growth, the unemployment rate will increase slightly, inflation will turn back, the property market will stabilize, and rents will fluctuate. The author expects that the local economy is expected to recover steadily. The chance of the economy continuing to decline throughout the year is very low, but it is likely to rebound sharply in the middle of the year.