CB Richard Ellis (CBRE) has warned that Hong Kong property prices could fall by up to 20 percent if the global economic outlook remains gloomy.
“We expect to see a correction of five to 10 percent in residential prices over the next 6-12 months. If sentiment continues to weaken, a correction of up to 20 percent would not be surprising,” said Edward Farrelly, Head of Hong Kong Research at CBRE.
He added that the US Federal Reserve’s promise to keep interest rates low until 2013 will unlikely promote home buyer sentiment, since the market is still susceptible to credit risks.
However, Farrelly believes that the city’s property market maintains a “relatively good position”, as growth in the area is not expected to slow down as it has in developed Western economies.
Additionally, oversupply in the market is minimal and investors tend to move their investments in emerging markets, including Hong Kong, during global slowdowns.
Midland Realty expects property prices to plateau or dip slightly throughout the rest of the year, after climbing around 10 percent in the first seven months from the same period last year.
Meanwhile, property developers are still launching new flats on the market. The Wings, a Tseung Kwan O residential project jointly developed by MTR Corp and Sung Hung Kai Property, is expected to be launched soon.
The 1,028 unit project features a gross floor area (GFA) of between 1,000 and 1,400 sq ft. Although prices of the units have not been disclosed, similar-sized flats in the vicinity are fetching between HK$8,000 psf and HK$8,300 psf.
To contact the journalist, you may send your message to editor@propertyguru.com.sg