Property market sentiment remains volatile due to the pandemic, yet around 10% of respondents consider it a good time to purchase a property for the third consecutive quarter

HONG KONG, CHINA - Media OutReach - 29 October 2020 - Citi Hong Kong conducted a survey in September this year pollingresidents' attitudes towards residential property ownership as COVID-19 continues.According to the latest quarterly survey:

• 10% of residents polled consider it a good time to purchase a property, among the highest levels on record over the past nine years. This follows on similar findings in the preceding two quarters of the year.
  
• From our second-quarter survey, it was projected that nearly 500,000 people toured new home developments within one month before responding to the survey, making this number the highest tally since 2013. Although this figure declined to almost 400,000 in the third quarter, it was still 50% higher than in the third quarter of last year, reflecting residents' interest in property ownership.
  
• Regarding the impact of COVID-19 on property prices, respondents expect a median decline in property prices of 5% from the beginning to the end of the current year, believing that COVID-19 would knock 8% off property prices at most, a hit milder than the actual price reduction of 10% to 12% during the SARS epidemic in 2003.
  
• Views on property prices for the coming year fluctuated in tandem with the COVID-19 case numbers. According to the survey results for September, the number of people who anticipated a dip in property prices (43%) was more than those holding the opposite view (23%), indicating a more pessimistic view on the property market than in June but a more optimistic view than in March.
  
• The situation of COVID-19 slightly eased in June, with 21% of respondents indicating an interest in purchasing a property, recovering the level as in the third quarter of the previous year. However, the number of respondents interested in purchasing a property declined again to 17% in September, similar to that at the beginning of the year.
  
• Most people who became more interested in purchasing a property amid COVID-19 were still adopting a "wait-and-see" attitude, expecting property prices to fall by another 20% before they would make a purchase. On the other hand, property owners polled indicated that only 5% were interested in selling their properties.

10% of the respondents believed it a good time to purchase aproperty, with nearly 400,000 people touring new home developments in the pastmonth

The survey results for the thirdquarter of 2020 showed that the property market sentiment remained relativelyvolatile, tracking the COVID-19 developments. Although a considerablepercentage of respondents still feel it is a bad/terrible time to purchase aproperty, 10% of respondents considered it a good/excellent time to purchase a property,still among the highest level in the past nine years.  . According to the survey results, it wasprojected that nearly 500,000 people had toured new home developments withinone month before replying on last quarter's survey, recorded the highest tally since2013. Although the figure declined to almost 400,000 this quarter, it was still50% higher than that of the same period in the previous year, reflecting residents'interest in property ownership.

Property price outlook impacted by COVID-19, withexpectation that home prices will see a smaller fall compared to that during SARS

Over 40% of respondents expect homeprices in Hong Kong to fall in the next 12 months, representing a largerpercentage than that of the previous quarter but smaller than in the firstquarter of the year. This showed that respondents' views on the property priceoutlook has been in line with COVID-19 developments. Benchmarked against a 10%decline in property prices witnessed during the SARS epidemic in 2003, thesurvey gauged the views of respondents on the trend of the property market amidCOVID-19 pandemic. The results showed that the respondents expected a mediandecline in property prices of 5% from the beginning to the end of the currentyear, and with the largest expected drop of 8%, which was smaller than theactual price reduction of 10% to 12% during the SARS epidemic.

Interested home buyers expect house prices to fall byanother 20%

WhenCOVID-19 situation slightly eased in June, 21% of the respondents indicated theirinterest in purchasing a property, recovering the level as in the third quarterof the previous year. That portion of respondents, however, experienced adecline again to 17% in September, similar to that at the beginning of theyear. Most people who had an increased interest in purchasing a property amidCOVID-19 were still adopting a "wait-and-see" attitude, expecting propertyprices to fall by another 20% before they would make a purchase. Meanwhile,property owners remained confident with only 5% of them interested in puttingtheir property for sale at the moment.

Base:All Respondents

"The results show that property marketsentiments continue to fluctuate in tandem with the pandemic and ongoingdevelopments," said Josephine Lee, Head of Retail Bank, Citi Hong Kong."The public began to regain confidence in the property market in thesecond quarter while becoming more cautious in the third quarter as COVID-19cases increased. A portion of people still found it a good time to purchase aproperty and even went to see new home developments, reflecting there areaccumulated home ownership demands yet to be fulfilled. We suggest that interested homebuyers comprehensively assess their financial conditionand choose a mortgage plan that best meets their needs."

Citi commissioned The University of Hong Kong Social Sciences ResearchCentre to conduct the survey, interviewing a random sample of over 500 HongKong respondents by phone in September 2020. Since 2010, Citibank has beenconducting quarterly surveys on the Hong Kong housing market to assess thecurrent state of home ownership in the SAR, gauge public intentions towardshome ownership, and track public expectations of future housing price trends.

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