Citi maintains its forecast that both property prices and rents will rise by 6 percent next year as demand remains resilient despite US rate hikes, the bank revealed in a latest report.
The bank forecasts that primary sales volume for the full year will increase by 3 percent to 21,100 units from last year.
Citi expects tighter supply in core districts, citing that the government's Long Term Housing Strategy Annual Progress Report 2026 predicted a housing supply target of 420,000 units over the next 10 years concentrated in the Northern Metropolis, of which 126,000 are private residential units. This marks 34 percent lower than the 190,000 target for fiscal years 2016-2025.
Citi further pointed out that authorities may have underestimated the number of households in the future as the influx of talent and non-local students will drive up housing demand, citing that student visas increased by 51,000 between 2015 and 2025, and the five-year plan sets a target of attracting 100,000 non-local students by 2030, resulting in a demand forecast of 2,300 units.
Citi believes that more professionals will be attracted to Hong Kong with the government's attempts to expand the scope of preferential tax regime for carried interest.
