Prices of luxury homes in Hong Kong, which have increased by more than 60 percent since early last year, may continue to increase by as much as 15 percent next year, attributed to a lack of new supply and low interest rates, according to CB Richard Ellis (CBRE).
Overall, home values will increase between 5 percent and 10 percent, said Yu Kam-hung, senior managing director for valuation and advisory services for Greater China at CBRE, adding that luxury home prices rose 16 percent this year and the real estate market value jumped 23 percent.
According to Midland Holdings Ltd, HK’s biggest realtor by market value, the number of housing transactions in the city-state may drop by as much as 35 percent next year, after the HK government implemented its toughest measures yet to make homes more affordable.
“We haven’t seen any changes in fundamental demand,” said Mr. Yu.
He added that the medium- to long-term outlook for the residential market next year will depend on whether the city’s government can keep to its promise of 20,000 new homes yearly for the next few years.
“If that turns out not to be true, then prices will continue to go up,” stressed Mr. Yu.