Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Thursday, Mar 30, 2023

Falling property prices: Hong Kong must rethink cooling measures, CPA Australia says

Falling property prices: Hong Kong must rethink cooling measures, CPA Australia says

Hong Kong property prices are tipped to fall further in 2023 even as the economy improves, according to CPA Australia, which also said it is time for the Hong Kong government to reconsider its property sector cooling policies.
Hong Kong property prices are tipped to fall further in 2023 even as the economy improves, according to a survey conducted by CPA Australia, which also said it is time for the Hong Kong government to reconsider its property sector cooling policies.

The survey, conducted in November, polled 210 respondent accountants and finance professionals, of which about 59 per cent said they expected retail shop prices to fall next year. About 56 per cent believed office prices would decline too, 54 per cent anticipated home prices would fall, while 52 per cent made the same forecast for industrial properties.

“The government could consider reviewing the extra stamp duties on property transactions, and setting out plans to boost tourism,” Eden Wong, CPA Australia’s divisional president of Greater China, said in a statement on Tuesday.

The Hong Kong government has since 2010 levied a slew of stamp duties on residential property transactions. The Hong Kong Monetary Authority, the city’s de facto central bank, has also imposed rules on home loans to dampen investment demand and runaway prices, and contain financial risks.

This is because the prices of lived-in homes in Hong Kong increased by 160 per cent from 2010 to 2021, according to a government index tracking the segment. As of December 4, however, they have plunged 17.6 per cent since a peak in August 2021, based on the Centa-City Leading Index, a gauge of lived-in home prices compiled by Centaline Property Agency. Moreover, the agency expects this gauge to decline further by late January, extending the decline to nearly 25 per cent.

“We think homebuyers will take a wait-and-see approach, unless either sellers soften their tone on pricing or the US Federal Reserve softens its tone on interest rate hikes,” Jieqi Liu, an analyst at brokerage firm UOB KayHian, said in a research report released on Tuesday.

Analysts said the good news is that China is easing its tough zero-Covid policy and Hong Kong is further relaxing its Covid-19 restrictions. The Hong Kong government on Tuesday announced international arrivals from Wednesday who test negative will no longer need an amber health code and can enter restaurants and other premises previously off limits to them. New rules will also do away with the scanning of QR codes to enter citywide premises.

Rapid US rate hikes and a weakened economic outlook would, however, continue to take a toll on the housing market, according to Joseph Tsang, chairman of JLL in Hong Kong. The performance of the city’s residential market will rely on whether a full-scale reopening with mainland China and overseas will stimulate the economy, he said.

Tsang also called for the government to relax its property sector cooling measures, adding that this would slow down the pace of home price declines.

The survey respondents’ pessimistic outlook for the property market contrasted with their views on the city’s economy, their firms’ revenue outlook and the job market.

Some 47 per cent said they expected Hong Kong’s gross domestic product to grow next year, while 13 per cent expected it to stay steady.

The “cautiously optimistic” outlook was probably driven by the easing of Hong Kong’s Covid-19 pandemic restrictions, which are helping to reconnect Hong Kong with the world, said CPA Australia’s Wong. This would support retail property prices, but residential prices will be more affected by US interest rate movements, as well as land supply policies going forward.

The government last month downgraded its full-year economic forecast to a drop of 3.2 per cent, compared to an earlier projection of between 0.5 per cent growth and 0.5 per cent contraction, citing a deteriorating external environment and the pandemic.

Business sentiment, however, appears to be improving, with 43 per cent of respondents forecasting that their companies’ revenue would grow in 2023. Just more than 20 per cent forecast a decline.
Newsletter

Related Articles

Hong Kong News
Close
0:00
0:00
China and Brazil have signed a new deal that will allow them to trade in their own currencies, bypassing the US dollar as an intermediary
Elon Musk and Others Call for Pause on A.I., Citing ‘Profound Risks to Society’
“We've had evidence prior to the pandemic that masks were largely ineffective at preventing community transmission of influenza “
Former Starbucks CEO Howard Schultz:
Former Starbucks CEO Howard Schultz rejects being labeled a "billionaire"
Jamie Dimon is being deposed over JPMorgan Chase role in Epstein lawsuits
Brand new security footage has just been released to the public showing the Active shooter Audrey Elizabeth Hale drove to Covenant Church School in her Honda Fit this morning, parked, and shot her way into the building
Social Media censoring users for saying the true
Smart Iranian fashion designer teaching dummy TV anchors lesson about reality
AMERICA, 2023
U.S. charges FTX's Bankman-Fried with paying $40 million bribe
Fallen 'Crypto King' Who Owes Millions to Investors Was Kidnapped and Tortured
Regulators blame social media for SVB's rapid collapse: 'Complete game changer'
AOC explains why she opposes banning TikTok
Singapore’s Prime Minister says China and US need to stabilize relations because world can't afford a confict between the two superpowers
In a dramatic U-turn against His Government: Judicial Reform Legislation Must Be Halted, Says Israeli Defense Minister Yoav Gallant
Gordon Moore, a co-founder of Intel Corporation, died at 94
Powell: Silicon Valley Bank was an 'outlier'
Bordeaux town hall set on fire in France pro democracy protest
Police violence in Paris
Paris: Some of the police are stepping down and showing solidarity with the protesters.
Donald Trump arrested – Twitter goes wild with doctored pictures
NYPD is setting up barricades outside Manhattan Criminal Court ahead of Trump arrest.
Credit Suisse's Scandalous History Resulted in an Obvious Collapse - It's time for regulators who fail to do their job to be held accountable and serve as an example by being behind bars.
Goldman Sachs cuts outlook for European bank debt over Credit Suisse crisis
Paris Rioting vs Macron anti democratic law
'Sexual Fantasy' Assignment At US School Outrages Parents
The US government has charged Chinese businessman Guo Wengui with leading a $1 billion fraud scheme that cheated thousands of followers out of their money.
Credit Suisse to borrow $54 billion from Swiss central bank
The BBC problem about China
Russian Hackers Preparing New Cyber Assault Against Ukraine
"Will Fly Wherever International Law Allows": US Warns Russia After Drone Incident
If this was in Tehran, Moscow or Hong Kong
Announcing GPT-4
TRUMP: "Standing before you today, I am the only candidate who can make this promise: I will prevent World War III."
China is calling out the US, UK, and Australia on their submarine pact, claiming they are going further down a dangerous road
A brief banking situation report
We are witnessing widespread bank fails and the president just gave a 5 min speech then walked off camera.
Donald Trump's asked by Tucker Carlson question on if the U.S. should support regime change in Russia?.
'No relation to the American SVB': India's SVC Bank acts to calm depositors amid brand name confusion.
Good news: The U.S. government is now guaranteeing all deposits, held by, Silicon Valley Bank, and the funds are available as of today
Silicon Valley Bank exec was Lehman Brothers CFO
In a potential last-ditch effort, HSBC is considering a rescue deal to save Silicon Valley Bank UK from insolvency
Saudi Arabia has announced a major breakthrough in diplomacy with Iran after two years of intense talks
Elon Musk Is Planning To Build A Town In Texas For His Employees
The Silicon Valley Bank’s collapse effect is spreading around the world, affecting startup companies across the globe
City officials in Berlin announced on Thursday that all swimmers at public pools will soon be allowed to swim topless
Fitness scam
Market Chaos as USDC Loses Peg to USD after $3.3 Billion Reserves Held by Silicon Valley Bank Closed.
A primitive judge in Australia sparked outrage when he told a breastfeeding woman to leave his courtroom for being “a distraction"
×