UBS tips home prices to fall up to 15pc

Business | Gary Poon 25 Oct 2018

UBS forecasts home prices to fall up to 15 percent in the next 12 months while Centaline Property said it has lost HK$70 million this month, as 200 agents failed to record any transactions over this year.

UBS wealth management global chief investment officer Mark Haefele said Hong Kong property prices are highly dependent on the macroeconomic environment.

He pointed out that prices kept surging in the past few years due to low interest rates and tight property supply, but now the ongoing Sino-US trade war amid a downturn in China's economy will lead to price drops.

However, the UBS report added that prices won't plunge deeply because of limited flat supply.

Meanwhile, Centaline residential chief executive Louis Chan Wing-kit said the company's recorded commission revenues of HK$85 million from October 1, while its average monthly operating cost is HK$250 million. He said Centaline will see its first monthly loss since February.

Chan added the firm sent a warning letter to 200 agents who did not make any deals over the year, and may be sacked at year end.

Separately, Centaline mortgage broker and mReferral mortgage brokerage is collaborating with TransUnion to offer one-month free credit report checking service to their customers.

TransUnion Hong Kong's director of consumer interactive, Lawrence Lo Shui, said the regular price of credit report checking service was HK$280 per month, with 14,000 people using the service last year.

Meanwhile, in the secondary market, owners continue to cut prices. For example, a three-bedroom unit at Lohas Park Le Prime, sized at 721 square feet, changed hands for HK$8.23 million, or HK$11,415 per sq ft - $1.47 million lower than the asking price.

At Vision City in Tsuen Wan, a 523-sq-ft two-bedroom unit recently fetched HK$9.72 million, or HK$18,585 per sq ft - HK$260,000 below the asking price.

Midland Realty chief executive Sammy Po Siu-ming said interest rate increases don't affected the property market much, and he predicted that in October, nearly 1,500 transactions will be recorded in the primary market, and 1,700 to 1,800 transactions in the secondary market.

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