Home prices could plunge 15pc in 2024, warns SocGen

Property prices in Hong Kong could fall by a further 10 to 15 percent in 2024 if interest rates remain high, Societe Generale warns.

And UBS says an easing of home purchase curbs by the government will have only a limited impact on the market.

Buying sentiment will be further weakened as interest rates might stay at high levels for a longer period, while developers are expected to offer price cuts amid an increasing number of new homes, which will keep dragging down prices, said SocGen.

But it is unlikely that there will be a "sharp and orderless correction" as in the late 1990s, the French bank said.

SocGen pointed out that the policy address released on October 25 will be a focus, which could roll out a series of supportive measures, including tax exemption for new immigrants via talent schemes.

However, UBS estimates that any cut in housing stamp duty would only boost transactions for four to 16 weeks, based on historical data.

Then the number of deals will drop again and the property market will not significantly recover until mid-2024 amid a high interest rate environment, the Swiss bank continued.

UBS expects the government will relax some home purchase limits against non-residents, such as imposing stamp duty on non-residents only when they sell the property before becoming Hongkongers.

Meanwhile, the number of mortgage applications for completed homes slid for the third consecutive month by 30.7 percent monthly in September to 5,152, a fresh five-month low, according to mortgage consultant mReferral.

Application numbers for presales also shrank for two months in a row by 36.1 percent to 131, the lowest in three months.

Additionally, the number of agents fell for sixth consecutive month by 207 in September to a three-year low of 40,223, data from Estate Agents Authority showed.

Last month, 17 property agencies shut down.

Separately, the Hong Kong interbank offered rate fell across all maturities yesterday, with the mortgage-related one-month tenor dipping to a two-week low of 5.06 percent.

In other news, The Urban Renewal Authority is selling the commercial part of One Soho in Mong Kok together with 11 car park spaces worth HK$400 million via tender, joint appointed agents CBRE and JLL said.