Sentiment weakens on home prices

Finance | Stella Zhai 12 Dec 2019

An increasing number of Hongkongers expect home prices to fall over the next six months, according to a survey by online real estate advertising company REA.

In the survey of 1,000 people, 90 percent said property prices were too high, while the proportion of those who believed prices would fall in the next half-year surged 48 percentage points over the past six months to 56 percent, reflecting a loss of confidence in the market after social unrest erupted, said REA's Hong Kong head Kenneth Kent.

Among respondents with a bearish view, 85 percent expected home prices in the New Territories to fall, while 71 percent expected a decrease in Kowloon and 66 percent in Hong Kong Island.

Only 19 percent of the respondents said they intend to buy a home in the next 12 months, REA noted.

Knight Frank expects sales volume and demand for local luxury houses to fall thanks to poor market sentiment but predicts a minor correction for luxury houses prices in 2020.

Meanwhile, a residential land plot in Causeway Bay, which closes for tenders tomorrow, has an estimated valued at HK$4.9-5.4 billion, or HK$38,000-42,000 per square foot, said Alex Leung, chief surveyor of CHFT.

The site has a size of 42,948 sq ft and a maximum gross floor area of 129,000 sq ft.

In the primary market, Ontolo in Tai Po, developed by Great Eagle (0041), showcased four-bedroom flats, with the company saying that large-sized units are being welcomed by the market. The developer has sold 411 units at the project so far.

In the secondary market, a unit at Lucky Plaza in Sha Tin sold for HK$5 million or HK$15,337 per sq ft, down HK$700,000 from its asking price and hitting a half-year low for the project.

Rents for the city's private residential projects also fell for the fourth consecutive month, dropping 0.8 percent month-on-month to HK$36 per sq ft in November, back to the level in December 2018, according to Centaline Property Agency.

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