The Hong Kong Monetary Authority, the city’s de facto central bank, is warning about “uncertainty” in the all-important housing market, where transactions plunged last month.
But Michael Spencer, Asia chief economist at Deutsche Bank AG, is optimistic, Bloomberg reported.
Spencer and property experts including CBRE Group Inc.’s Yu Kam-Hung and Knight Frank LLP’s David Ji point to the healthy finances of borrowers and continuing domestic demand for housing as evidence Hong Kong isn’t on the verge of repeating the six-year slump that started in 1997.
Barring a major political upheaval in China, the decade-long property bull market is likely to continue, albeit at a slower pace, they said.
The US Federal Reserve is expected to raise interest rates soon, and Hong Kong, whose dollar is pegged to the US dollar, must follow suit.
“People say property prices will fall because of the Fed, and that in my view is wrong,” said Spencer, who based his conclusion on 20 years of data.
“If you build a model based on real interest rates and real [gross domestic product], neither have mattered.”
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