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Wednesday, July 27, 2016, 22:56

Properties — It's still 'wait and see'

By Oswald Chan
Properties — It's still 'wait and see'
Middle-class residential buildings in Quarry Bay. More than 60 percent of interviewees in a recent survey said they expected local homes prices to fall further, with another 26 percent holding a “stable” outlook. (Parker Zheng / China Daily)

Recent improved sentiment in the local property market is still unconvincing for most people who might be craving to purchase a home, as economic uncertainties drag on.

Up to 55 percent of respondents in a survey reckoned it’s still a bad time to take the plunge, while more than 60 percent thought prices would fall further.

According to the poll carried out by Citibank on Hong Kong residents’ home-buying intentions in the second quarter of this year — 55 percent of those interviewed said it’s a bad, or extremely bad time at present to enter the market after taking into account the current consumer price level and the status of household finances given they do not own any property.

The percentage is relatively lower than the 67 percent recorded in the fourth quarter of last year, and 57 percent in the first quarter of 2016.

Citibank has commissioned the Social Science Research Center of the University of Hong Kong since 2010 to conduct random phone interviews with 500 residents on a quarterly basis to gauge their latest perceptions of the local housing market.

According to the results of the survey released on Wednesday, 64 percent of the respondents said they were very uninterested or quite uninterested in buying an apartment at the moment — down 2 percentage points from the previous quarter.

Another 23 percent said it’s neither good nor bad at present to acquire a home here — up 4 percentage points from the last quarter.

More than 60 percent of the interviewees said they expected local homes prices to fall further — down 11 percentage points from the historical high level recorded in the first quarter of this year.

Another 26 percent of the respondents predicted that Hong Kong real estate prices will remain stable — up 6 percentage points from the previous quarter.

“The survey shows that even though more residents consider the pace of the price correction as having stabilized, they would prefer to remain on the sidelines amid the lingering global economic uncertainties triggered by Britain’s decision to quit the European Union,” said Lawrence Lam Chi-kong, head of retail banking at Citibank.

Sentiment in the city’s property sector has improved with market experts predicting that Brexit would prompt the US Federal Reserve to prolong the ultra-low interest rate environment.

After the US Federal Reserve raised the federal funds rate late last year in the range from 0 percent to 0.25 percent to 0.25 percent to 0.5 percent — the first rate hike in almost a decade — financial markets now expect another rate increase to take place, possibly, by the end of 2016.

“Local homes prices have already rebounded 2 percent from their lows recorded in March, and we expect prices to go up in the second half of this year,” said Lam.

Despite the recent corrections, local property prices are still 10 percent below the historical peak registered in September last year.

oswald@chinadailyhk.com
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