Despite concerns over declining home prices, Hong Kong’s property market is likely to remain stable this year amid solid demand from end-users, top industry players said.
Hang Lung Properties Ltd. (00101.HK) chairman Ronnie Chan said the market is at its healthiest state in 20 to 25 years, the Hong Kong Economic Journal reported on Friday.
Commenting on the recent correction in home prices, Chan said it is normal for property prices to fluctuate within a range of 15 to 20 percent.
There is no need for the government to remove the property curbs it has put in place for now, he added.
Chan said it was a wrong decision to have halted regular land sales since 2005, which he blamed for the shortage in housing supply and the surge in home prices.
He said although home prices declined to a low level in 2003 due to a weak economy and the SARS outbreak, the government should have continued with regular land sales to ensure ample supply.
Nonetheless, property prices are still relatively expensive, as demand is boosted by new couples looking for about 40,000 to 50,000 flats each year, new immigrants and homeowners who want to move to new units, Chan said.
In his policy address on Wednesday, Chief Executive Leung Chun-ying blamed a “man-made shortage” and “vested interests” for the city’s unaffordable home prices.
He said the current property price and rental levels are still beyond what people can afford, and have distorted the values of the younger generation.
Home prices fell in the last two months of last year, with the month-on-month drop expanding to 3 percent, according to the latest figures from the Rating and Valuation Department.
Victor Lui Ting, deputy managing director of Sun Hung Kai Properties Ltd. (00016.HK), is also expecting a stable market for mass housing, assuming a steady pace of US interest rate hikes and the city’s continued economic growth.
A modest rise of 5 to 10 percent in luxury home prices can be achieved this year, given the more conservative attitude of developers in selling properties in the segment, Lui said.
[Chinese version 中文版]
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