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A hot new year envisioned for Hong Kong


Property Report

Property prices in Hong Kong will be even more scorching hot next year, major analysts reported.

Home prices in the Chinese SAR are projected to climb to as much as 20 percent in 2018, according to Jones Lang LaSalle (JLL), while Cushman and Wakefield forecasted they could rise by 10 percent.

Hong Kong, one of the world’s leas affordable cities, will ride high on a high economic growth, the stock market boom, and record-low unemployment.

The consultancies’ forecasts come as speculation remains rife on the Federal Reserve’s move to hike policy interest rates this week. The hike could heighten borrowing costs in a state with a currency is pegged to the greenback, but a hard landing for home values is not expected.

“It will only add an additional HKD2,000 (USD256) monthly mortgage instalment for homeowners who borrow HKD$5 million from banks even if Hong Kong raises interest rates by 0.75 percentage point in 2018,” Buggle Lau Kai-fai, chief analyst at Midland Realty told the South China Morning Post. “Homeowners are unlikely to sell their flats at lower prices just because of such a small increase in home loans.”

"Property buyers have digested the pressure of interest rate rises," Joseph Tsang, managing director and head of capital markets at JLL, told Nikkei Asian Review. "Buyers also have real need."

A double-digit growth in H1 2018 will mark “the longest growth streak” for home prices in the Chinese SAR since the first quarter 2016, according to Alva To, vice-president and head of consulting, Greater China at Cushman & Wakefield.

Prices of secondary homes in the Chinese SAR have risen for 19 months in a row as of October, according to the Rating and Valuation department. 

Property Report
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