How much will Hong Kong property rebound this year?
Call it the little blossoming spring, as the local saying goes.
From Sun Hung Kai Properties to its rivals to agents such as Centaline, all honchos would say the property market would go up between five and 10 per cent. They said these just as we greet each other “Kung Hey Fat Choy” in the Chinese New Year.
This year, however, is a bit more interesting because there are pull and push factors in play that make the future home price even more unpredictable.
Those who witnessed the strong 50 per cent equity run of Hong Kong stock markets seen since late last October would naturally think the local property market should deserve a closer look.
After all, it was a rare bad year for local home market that fell 15.6 per cent last year, according to the Rating and Valuation Department, ending a 13-year consecutive uptrend.
The pandemic, of course, was to blame. Many citizens and expatriates were leaving due to the frustrations of the social distancing measures.
That was reflected in the home market where some people cashed out with good profits. But some were selling at a loss, exemplified by the negative equity cases soaring to more than 12,000 cases, an 18-year high.
This time, the number of negative equity cases was higher than the financial tsunami in 2008-9 but still fell short of the SARS period in 2003 where one-fifth of all borrowers were in negative equity.
Luckily, Beijing finally decided to open borders at the expense of a Zero-Covid policy last December. All of a sudden, the wish to get more high-spending mainland tourists and property buyers came true for Hong Kong.
Those who live here witnessed the best period in the last month during the three-year pandemic as smiling faces returned to this city – and the paper’s front page too.
As such, it is not difficult to explain why developers would make the same prediction on the home market. In fact, it was puzzling why they are so conservative.
Perhaps they have too many houses on hand. The available home supply rose to over 100,000 units, an 18-year high, especially in Kai Tak and Tsueng Kwan O areas. Friends who are in the mortgage business said the buying improved but is still far from normalcy.
One banker complained that he had no time and appetite for lunch, having to deal with a few dozen default cases.
A home hunt in Hong Kong Island in the past week with a good friend tells a different story. Even with a sharp decline, it seems quite impossible to buy a decent (not too small, not too old, in a good MTR-accessible district) two-bedroom unit below HK$10 million.
More update on home-hunting but welcome to the Hong Kong property market where buyers and sellers are both trying to get what they want in 2023!
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