Hong Kong’s property market could suffer a major downturn in 2016 or 2017, similar to what happened in 1998, according to Eric Wong, founder of property investment firm Bricks & Mortar Management.
A large amount of new public housing supply coupled with a new cycle of interest rate hikes and a strong US dollar could pressure the Hong Kong property market in the next couple of years, the Hong Kong Economic Journal quoted Wong as saying.
But in 2015, local property prices could rise another 10 to 20 percent before peaking out, Wong said.
The Centa-City Leading Index, a main gauge of property prices in Hong Kong, stood at 132.45 last Friday.
The level was 28.7 percent above the peak in 1997, with a cumulative rise of 11.3 percent over the last 12 months.
Wong said the index could have risen to 170 if the government had not stepped in.
Yet, all the measures that deter speculation, and upcoming supply, may set up conditions for a perfect storm, Wong warned.
Property owners have to be extremely cautious if the US dollar index rises to 110 from the current 90 level, Wong said.
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