Hong Kong’s residential prices will rise by as much as 5 per cent this year, US rating agency S&P Global Ratings said on Wednesday.

The agency said buoyant housing demand, a chronic shortage of land and housing supply, as well as a consistently low interest rate environment will support price rises. It joins a chorus of industry observers, which has forecast that Hong Kong residential prices will rise this year.

“During the past two decades, Hong Kong property prices have tended to bottom out when the jobless rate hasis about to peak. This will underpin developers’ residential development margins,” S&P Global said. It said that Hong Kong’s unemployment rate seems to have come off a peak of 7.2 per cent in February to 6.8 per cent in March, while its economy grew by 7.8 per cent in the first quarter.

These developments will, ironically, hurt many Hongkongers’ hopes of owning their own homes, as a revival in the city’s economy and falling unemployment could lift flat prices in the world’s most expensive real estate market.