Property prices
are expected to decline by up to 20 percent by the end of next
year amid global financial turmoil and rising mortgage
rates.
"Prices in the mass residential market will drop
by 15 to 20 percent [by the end of next year], although
affordability is still strong," Simon Smith, deputy managing
director at Savills Valuation and Professional Services, said
yesterday.
He said prices in
the luxury residential market could fall 25 to 30 percent
during the period.
"Continued
integration with China has alleviated the impact of a slowing
economy, the credit crunch, and high inflation on Hong Kong,"
said David Tse Kin-wah, Hong Kong board chairman of the Royal
Institution of Chartered Surveyors, "but scarce supply of
developable land in urban areas and the constant inflow of
investors' funds into Hong Kong Kong help stabilize the
downward trend of residential prices."
Citi
analyst Tony Tsang said in a note: "The latest hikes in
mortgage interest rates and declines in property rentals have
made us more bearish on Hong Kong property. The downward
spiral in the property market will continue, in our view, and
corrections will likely overshoot on the downside."
Under tightening
measures, "[prices] in the mainland property market will drop
20 to 30 percent by the end of next year ... particularly in
first-tier cities," Smith said.
But he also
expects prices to recover as the government will likely
implement policies to stabilize the market once it has fallen
too much. "They will be careful to support the market," he
said. |
