Hong Kong home prices may begin drop in 2016: JPMorgan
[HONG KONG] Hong Kong's property prices may correct next year after reaching a record high, as an economic slowdown in China and Hong Kong starts to weigh on real estate, according to JPMorgan Chase & Co.
Residential prices may start to fall by 5 per cent to 10 per cent annually starting in 2016, Cusson Leung, head of Hong Kong research, conglomerates and property for JPMorgan, said in a briefing on Friday. Prices of new homes will rise by 5 per cent in 2015, as demand remains strong. Prices of existing housing will increase by 10 per cent, according to Leung.
Mr Leung said the shrinking retail market, driven by luxury brands closing stores, as well as the prospect of rising unemployment in Hong Kong will hurt property sales. Investors globally have been rattled by concern that China's growth is slowing and that the markets may not be able to withstand an increase in US interest rates.
"Pressure on the economy is the biggest concern here instead of an interest rate hike," said Mr Leung.
Hong Kong's private-sector economy suffered its sharpest contraction since 2009 in August, sending a warning sign for the economic health of Asia's financial capital.
Hong Kong reported the weakest home sales in 17 months last Wednesday, after a month-long stock rout that began in China hurt market sentiment among home-buyers and investors. It sold one-third fewer units in August than a year earlier, according to data from the government.
BLOOMBERG
No comments:
Post a Comment