RICS-Spacious report indicates continuous decline in prices, sales volumes and rents
HONG KONG, CHINA - Media OutReach
- 19 September 2019 - Amidst trade tensions
between China and the U.S., Hong Kong's political unrest has continued to
dampen market sentiment. According to the newly published RICS-Spacious Hong
Kong Residential Market Survey, Confidence Index continues to fall from -54 in
July to -76 in August.
The survey also indicates that both buyer and
rental demands have reported significant deterioration, with rental demand recording
its first negative reading in the survey's history.
During the most intense period of protests,
nearly 70% of respondents have cited some degree of price decline over the past
three months. Prices, sales volumes and rents are expected to dwindle in the
Aggregate prices are expected to fall 4.6%
across Hong Kong, sales volumes are seen slipping 5.3% and rents 2.5%. The
market outlook prediction seems to be a significant reversal since June, where
survey contributors anticipated an increase on all three of these metrics.
"Participants also commented that a cessation
of the protests appears to be unlikely in the near-term, which contributed to
the more subdued medium-term outlook for the market", said the report's author
Sean Ellison, RICS Senior Economist for Asia-Pacific. Ellison also states that
"some survey respondents cited tariff escalation between China and the U.S. as
a headwind, the ongoing political unrest continues to be the main catalyst
cited as driving market pessimism."
Although the current market sentiment is
similar to when trade tensions escalated and when interest rates were expected
to increase in October 2018 and February 2016 reports respectively, a clear
resolution to the city's unrest is proving to be elusive.
The RICS-Spacious Hong Kong Residential
Property Monitor is a monthly sentiment index tracking trends in the commercial
property market. It is a leading indicator for global investment and occupier
markets. The full report is available at www.rics.org/economics.
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