- Lived-in home prices are set to fall in 2020, the first decline in 12 years, according to Ricacorp Properties
- Rents are also retreating as recession in the city sparks pay and job cuts, eroding demand from a shrinking pool of expatriates
Homes in housing estates catering to middle-income earners offer the best value for bargain hunters in Hong Kong with prices headed for their first drop in 12 years, industry analysts said.
Increasing emigration, coupled with shrinking headcounts at multinational companies in the city, could ensure they continue to remain a buyers’ market. The same factors could also depress rates of higher-priced homes, they added.“The number of emigrants in the last year has risen, and those who are rushing to sell are more willing to negotiate and offer bigger discounts,” said Derek Chan, head of research at Ricacorp Properties. Rents will also come under pressure as demand wanes, he added.Among 50 housing estates tracked by Ricacorp, Lake Silver in Ma On Shan, Island Resort in Siu Sai Wan, Ocean Shores in Tiu Keng Leng and Park Avenue in west Mong Kok saw the biggest pullback in November year on year. Home prices fell by 7.4 to 7.7 per cent in the period, compared with the citywide equivalent of 1.3 per cent based on the index from the Rating and Valuation Department.
Home prices in Hong Kong were little changed in the first 11 months of 2020, according to official data. December’s data, which is only due later this month, is likely to weaken and cause a drop for the full-year, Chan estimated.
The window for bargains may not last for long as prices may rebound later this year as efforts to contain the Covid-19 pandemic gain traction and vaccination drive accelerates. Hong Kong could exit from its worst recession this year, Financial Secretary Paul Chan Mo-po said over the weekend.
If Covid-19 vaccines can be provided and turn out to be effective, estates with bigger drops in prices in 2020 will become bargains and see more significant rebounds in prices in 2021, Chan of Ricacorp said.
Source: SCMP (8:30am, 6 Jan, 2021 ) Read the Full Article
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