Property price resilience

In recent months, Hong Kong has been plagued by internal and external problems

The Sino-US trade war has continued. The global economy has suffered setbacks. The political events in Hong Kong have continued for nearly three months. There are still no signs of abating. The economy of Hong Kong is being challenged and the Hong Kong property market is hard to be affected. According to the latest data released by the Rating and Valuation Department, in July this year, the private residential price index reported 394.4 points, down about 0.1% month-on-month, and fell for two months. As for the first seven months of this year, the index still rose by about 9.7%, about 2.2 percentage points lower than the 11.9% increase in the same period last year. Among the many properties, the performance of large units and luxury homes is more prominent, and the resilience is slightly better.

Looking back at the easing of the trade war at the beginning of this year and the expected cooling of the Fed’s interest rate hike

stimulating property market transactions, property prices have also risen, and second-hand housing estates have successively recorded broken deals, but the mid-year trade war has reignited, adding to the shadow of the global economy. In June, Hong Kong was involved in a vortex of political events to combat the Hong Kong economy. The Government has lowered its annual economic growth forecast to 0% to 1%. In view of the weakening of the market sentiment, some second-hand owners who are eager to sell their flats have begun to widen the bargaining space to about 5% to 10% to facilitate transactions. Second-hand property prices have fallen slightly from high levels. If the political and economic situation continues to be unstable, it is expected that second-hand buyers will remain on the sidelines in the short term. Unless second-hand owners are willing to substantially reduce their prices, short-term second-hand trading will be “quickly frozen."

See the adjustment of property prices. Which types of units have strong resilience?

According to the data of the Department of Differential Assessment, the unit size of the two types of areas in July this year was very different. The small and medium-sized selling price index of 1,075 sq. ft. and below was 397.4 points, down by about 0.15%. This year, as of July, it has accumulated a cumulative increase of about 9.8%. However, the sale price of large residential units with a saleable area of ​​1,075 square feet or more is raised. The unit price index for this category was 333.7 points, up about 0.66% from June. In the first seven months of this year, it still rose by about 7.9%. The above data reflects that large units are more resilient than small and medium-sized units. In fact, large-scale luxury residential units are more powerful and their holding power is stronger than that of small and medium-sized units. Therefore, the price is relatively “hard”.

It is worth noting that, under the unclear market prospects, some buyers may choose to “rent first", wait and see the development of the market and then decide whether to enter the market. In addition, during the summer vacation rental season, many mainland residents will be welcome to start school and rent. The market is buoyant. According to the data of the Department of Differential Assessment, the rent index for July was 197.3 points, which rose by about 0.3% month-on-month and rose for five consecutive months. Looking ahead, there are a lot of new entrants in the future. According to statistics, there are more than 20 new entrants in the second half of the year, involving a total of more than 11,000 gangs. The supply centers include Kai Tak, Yuen Long and Tseung Kwan O. The market demand for housing is strong. The rental market continues to thrive in the short term.

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