Date
20 September 2017
The percentage of respondents who believe home prices will rise in the coming 12 months dipped by four percentage points to 57 percent. Photo: GIS
The percentage of respondents who believe home prices will rise in the coming 12 months dipped by four percentage points to 57 percent. Photo: GIS

Only 1% of Hongkongers say now is right time to buy property

Only 1 percent of Hongkongers think now is the right time to buy property while 79 percent say this is a bad time, the Hong Kong Economic Journal reports, citing a survey by Citigroup.

The 1 percent figure is the lowest since the survey began in 2010 while the 79 percent is an all-time high.

The quarterly survey was conducted in June by the Social Sciences Research Centre of the University of Hong Kong and interviewed 500 respondents aged over 21.

Only 14 percent said they are interested in buying a property, down nine percentage points from the previous quarter.

Those who said they are not interested in any property purchase rose to 55 percent, up seven percentage points from the preceding survey.

The percentage of respondents who believe home prices will fall in the coming 12 months increased for the first time after falling for four quarters in a row since the first quarter of 2016.

About 13 percent of the respondents said home prices would be on a declining trend, up four percentage points from the previous quarter. The percentage of respondents who believe home prices will rise in the coming 12 months dipped by four percentage points to 57 percent.

Terence Chong Tai-leung, an associate professor of economics at the Chinese University of Hong Kong, said whether or not people consider it a good time to buy property hinges on their affordability.

If home prices are well beyond their means, it is not necessarily a good time to buy even if prices are projected to increase further, Chong said.

Another consideration is the percentage of increase, he said. Even if prices are set to go up in the coming 12 months, questions have to be asked if the increase would be significant enough to offset the transaction costs, such as the stamp duty and commissions to real estate agents.

However, Chong said that similar surveys are conducted on a random basis. If the respondents are mainly property owners, they could hope that home prices continue to climb.

Chong said property prices are unlikely to tumble given the relatively strong economic fundamentals.

Meanwhile, Citigroup predicted that property prices could retreat by 10 percent by February 2018, while BOCOM International said local home prices could tumble by 30 percent in the coming six to 12 months amid falling rents, tight liquidity in China and the shrinking balance sheet by the US Federal Reserve.

– Contact us at [email protected]

EL/YH/BN/RA

EJI Weekly Newsletter

Please click here to unsubscribe