- Property prices expected to rise 5 per cent in the second quarter, says Centaline Surveyors
- Government needs to speed up the development of brownfield sites and land sharing scheme to increase land supply
Hong Kong property prices are expected to bounce back in the second quarter amid rising sales of new flats, according to Centaline Surveyors.
Louis Chan Wing-kit, vice-chairman for Asia-Pacific at Centaline Surveyors, said property prices could bounce back by 5 per cent in the second quarter from its lowest point last year, as buyers take advantage of low interest rates and gradual easing of the social unrest.
"Home prices went on a roller-coaster ride last year," Chan said, noting that net price gain in Hong Kong was 4 per cent in 2019. Residential prices fell 6 per cent in the second half as demand weakened because of the violent anti-government protests, after rising more than 10 per cent in the first six months of last year, according to Centaline.
Chan said that so far in January, 1,130 transactions have been concluded, mostly because of strong sales at Sun Hung Kai Properties' Wetland Seasons Park. The number of deals is nearly 70 per cent more than the 675 signed in December, but far short of the 2,197 reached in January 2019.
The upbeat sentiment was shared by Thomas Lam of Knight Frank. "After the holidays, property prices could boom temporarily at higher transaction volumes, but turnover may not be as high as previous years," said the Knight Frank executive director.
However, property consultancy Colliers International took a different view, saying in its annual outlook on Tuesday that it expected Hong Kong property prices to fall 5 per cent and luxury home prices to drop by a much sharper 10 per cent.
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According to Hannah Jeong, head of valuation and advisory services at Colliers, homebuyers are delaying their purchases until after the Lunar New Year holiday as they expect prices to drop further.
Meanwhile, land shortage will continue to weigh on new flat supply, as the government is expected to cut its land sales target by 4.44 per cent in the next financial year starting April, according to Centaline. Some 12,000 units will hit the market in the 12 months to March 2021, down from its current target of 13,500.
Last year, the government sold just enough land to build 11,850 housing units, the lowest level in the past nine years, falling 12.6 per cent behind its target, said Samson Ng Ting-sum, a senior manager at Centaline Surveyors.
Ryan Ip Man-ki, head of land and housing research at think tank Our Hong Kong Foundation, said that all signs show that the private housing supply is going to go down in the next few years.
Last year, presale consent of flats dropped by 38 per cent year on year while construction commencement fell around 30 per cent, he added.
Centaline Surveyors urged the government to speed up the development of brownfield sites and cooperate with private developers to increase land supply.
"The government does not have much land left for tender sales. So, it must accelerate the development of brownfield sites and ensure the success of the land sharing scheme in order to meet the needs of the residential property market," said Centaline's Chan.
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