Homes biggest burden as HK consumers remain gloomy

Top News | Phoebe Ng 9 Apr 2018

Phoebe Ng

Hong Kong consumers were the most pessimistic in Greater China for a second consecutive quarter, according to findings from a four-way confidence index study released yesterday.

The SAR scored 86.8 points out of 200 - bottom among the four components that also include the mainland, Taiwan and Macau.

Any score below 100 indicates a lack of confidence.

City University, responsible for the Hong Kong portion of the survey, interviewed 1,001 people from March 5 to 31.

The mainland's index was the highest among the four regions at 105 points. That was down 0.1 points on the previous quarter. It was followed by Macau with 89.9, or 1.8 points up, and Taiwan with 88.8, or 1.3 points better than last time.

Among the six areas of consumption covered by the survey, Hong Kong's home ownership confidence was lowest at 39.

Geoffrey Tso Kwok-fai, City University's director of statistical consulting, said despite a slight rebound in that portion of the survey the property confidence index remained at close to a record low since the study started in 2009, which was the main reason for the SAR's overall poor showing.

"The soaring home prices continued to draw Hongkongers away from home ownership," he added.

But he attributed a rebound from 36.8 previously to a more optimistic outlook.

"Property prices kept breaking records in the last quarter, leaving a fear of a housing bubble," Tso said. "While the price levels are still very high people now expect the market to continue to grow."

Hong Kong's home prices rose to an all-time high in February, extending the record-breaking run to 16 straight months.

Rating and Valuation Department data showed the index rose 1.62 percent in February, or 16 percent year-on-year, making Hong Kong one of the most expensive places to live in the world.

Tso does not expect much change in homebuying sentiment this year.

Respondents were the most confident when it came to Hong Kong's living standards, which with a score of 110.8 points was a 0.2 percent rise.

Indexes on employment inched up 2 percent to 110.6 points and confidence in pricing rose 1.8 percent to 69 points.

The rise in the three categories offset falls in confidence for housing, economic development and stock investments.

Economic development and stock investments dipped 1.1 and 5.1 percent to 105.6 and 85.9 respectively.

Those two falls are partly due to the market uncertainty from a potential trade war between America and China, Tso said.

The Hang Seng Index advanced 1.1 percent to close at 29,844 on Friday.

It came after the benchmark tumbled 2.2 percent on Wednesday, when China announced retaliatory tariffs on US imports, fueling fears of a trade war.

The study also took a closer look at retirement protection given Hong Kong's aging population and found a low satisfaction level of 45.71 - about the same in the previous study.

"About 30 percent of our population is aged 55 or above, meaning retirement policy has a huge potential impact on confidence," Tso noted. "The index showed Hong Kong offers inadequate protection for retirees."

On that, 42.5 percent of respondents rely on savings to get by in retirement.

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