Reversal of home price expectations among respondents; Young singletons aspiring for home ownership

HONG KONG, CHINA - Media OutReach - 29April 2019 - Citi Hong Kong announced today the results of its surveyon residential property ownership in Hong Kong for Q1 2019. The survey foundthat the percentage of respondents who expected home prices in Hong Kong torise in the next 12 months increased over the preceding quarter, and so did thepercentage of respondents showing an interest in property ownership,particularly among the young and single. There was also a higher percentage ofrespondents who took a neutral stand on whether this is a good time to purchasea home, reflecting a wait-and-see attitude among potential home buyers.

Expectationsreversed: more respondents expecting home prices to rise in the next 12 months

The percentage of respondents who expected home prices inHong Kong to rise in the next 12 months was up drastically from 18% in Q4 2018to 42% in Q1 2019. In comparison, the percentage of respondents who expectedhome prices to fall was down significantly from 57% in Q4 2018 to 24% in Q12019.

Since the second half of 2018, the market had been batteredby multiple headwinds, including the US-China trade war, interest rate hikes,and a weakening yuan. However, with these news gradually discounted during Q12019, the expectations among local citizens of the future property price trendwere reversed.

Base: All Respondents
* Figures may not add up to 100% due to rounding

Strongeroverall interest in home buying; Young singletons desirous of a starter home

Despite the prevailing expectations of rising home prices,the respondents showed a stronger interest in buying a home. 26% of therespondents expressed a very or rather strong interest in buying a property inQ1 2019, a record high percentage since the survey was first conducted. 37% ofthose aged between 21 and 29 expressed interest in home buying, higher than thecomparative figure of 19% recorded in Q4 2018. One third of the respondents agedbetween 30 and 44 have the same interest.

According to the results, 31% of the single respondents alsoexpressed a very or rather strong interest in buying a property, reflecting aparticularly keen desire for home ownership among the young and single.

Base: All Respondents

A slightly lower percentage of respondents said it is not a good time topurchase a home now

Still representing a simple majority, 57% of the respondentsin Q1 2019 felt that it is not a good time to purchase a home, down from 67% inQ4 2018. 39%of the respondents took a neutral stand in Q1 2019 on whether this is a goodtime to purchase a property, reflecting a wait-and-see attitude among manypotential home buyers.

Base: All Respondents

Josephine Lee, Head of Retail Bank, CitibankHong Kong, said, "The results show that local citizens' view on the propertymarket has reversed as they expect home prices to rise in the coming year. Given the expectations of risinghome prices, local citizens are likely to become less confident in their homeaffordability. To make their dreams of home ownership come true, it isimportant for potential home buyers to consider financial services besttailored to their needs, with a comprehensive wealth management plan in place."

Citibankcommissioned The University of Hong Kong Social Sciences Research Centre toconduct the survey, interviewing over 500 Hong Kong respondents by phone inMarch 2019. Since 2010, Citibank hasconducted a quarterly survey on the housing market to assess the current stateof homeownership in Hong Kong, gauge public opinion on the subject ofhomeownership and public expectations in terms of future housing price trends.

Source: Citibank Q1 2019 Residential Property Ownership Survey