Set your alarm clock for 2017. That’s going to be the time to buy property in Hong Kong, according to a chorus of investment banks (and, no, we’re not certain that’s the right collective noun).
CLSA has forecast a 17 percent drop in property prices over the next 27 months in its latest research report.
“We expect [a] 17 percent price correction in the next 27 months, with two percent in the fourth quarter, 10 percent [next year] and five percent in 2017,” Nicole Wong, CLSA’s regional head of property research, said in the report, according to the SCMP.
The predictions will come as welcome news to Hongkongers, who have seen property prices surge a mind-boggling 370 percent since 2003 (but then there was that whole SARS thing), and climb by 8.6 percent to a 15-year high in the second quarter of this year.
According to the report, the sell-through rate of new units has fallen from 90 percent last month to 65 percent this month, with Midland Realty also reporting a 19.5 percent drop in the sale of luxury homes – which are defined as costing HKD10 or more, FYI.
For example, Ricacorp Properties revealed that an 802 square foot flat in Mid-Levels just sold for HKD13 million, HKD2 million under its asking price. Hopefully, whoever forked out for that put what they saved towards a perfectly decent and “reasonably” priced flat not in Mid Levels.
While other investment banks are predicting falls similar to those forecast by CLSA, some have suggested prices could drop by as much as 30 percent by 2017.
Rents overall are also expected to go down, but possibly only because more micro flats are being built. Apparently you’ll be charged a smidge less if you live in an actual shoebox, which is nice to know.
Photo: Edward Dalmulder
