CCL fell again, with New Territories East among has the largest drop of 1.8%.
(By Lai ChiTin)
Hong Kong property market is on the cusp of high prices, because of a series of violent demonstrations in recent days and President Trump's threat to China by imposing tariffs. The Centa-City Leading Index (CCL), which reflects the trend of second-hand property prices in Hong Kong, fell again this week after rebounding last week, and it is 188.76 points, down 0.35% weekly. The Chairman of Centaline Group, Shih WingChing expressed in a radio show yesterday that, although a series of "social events” recently were expected may not make the property market to fall sharply, but it was expected that a single-digit decline would be recorded in the second half of the year, one reason among is most people in Hong Kong had no purchasing power.
According to the announcement, three leading CCL overall indexes had fallen this week, while the four leading overall indexes had risen in last week, and property prices continued to up and down at a high level. In the past four weeks, the fluctuation of property prices has narrowed markedly, and the CCL index at the highest of 189.77 points and the lowest of 188.76 points, with the range in 1.01 points. The Senior Co-director of Centaline Research Department, Woo LeungSing predicts, CCL will stabilize at a high level and goes up and down slightly, with the trend to be flat. As for the effect to Hong Kong property market from related news that the United States announced a 10% import tariff on the remaining USD300 billion of Chinese goods on August 2 plus Federal Reserve System (Fed) announced to decrease interest by 0.25% and an early end to the shrinking balance sheet on August 1, it will begin to reflect in late August of this year.
Indexes of all types’ units fall together.
The company’s report points out that, the latest CCL was reported at188.76 points, down 0.35% per week. The CCL Mass was reported at 191.19 points, slightly up by 0.01 point, that is no up or down. CCL (small and medium-sized units) was reported at 189.29 points, down 0.09%. CCL (large unit) was reported at 186.03 points, down 1.70%.
As for the property price indexes of the four districts, two rose and two fell. CCL Mass in New Territories West was reported at 172.89 points, up 1.89% per week, showing that the over-subscription for new project T Plus in Tuen Mun had driven up property prices in the district. Kowloon CCL Mass was reported at 188.08 points, up more 0.28%, a total increase of 1.27% for four weeks, reflecting that Kai Tak residential land king stimulated Kowloon property prices to rise. Hong Kong Island CCL Mass was reported at 196.73 points, down 0.78%. New Territories East CCL Mass fell after rising for three weeks, and it was reported at 198.55 points, down 1.84%.
Wait-and-see attitudes drags down the transactions sharply.
The Chairman of Centaline Group, Shih WingChing believes, Hong Kong property market is less affected by recent "political events" because most people in Hong Kong have no purchasing power, but it is necessary to pay attention to the attitude of 10% people who have the purchasing power in the market. He believes that property prices may not fall sharply in the second half of the year, since the property market is not only affected by political factors, but also by the flow of funds. Shih WingChing describes, buyers generally hold a wait-and-see attitude toward entering the market because of current turmoil and chaos, and this significantly drags down the transactions.
Shi Yongqing continues to express, many investors tend to put money into property, so there is a greater chance of slow adjustment in the property market, and it is expected that the property prices will have single-digit number of declines in the second half of the year.
In addition, he points out that, it is understood that the Government have no time to deal with the problem of increasing land supply, but it is believed the quickest way to increase land supply is to redesign existing land, which means not necessarily to develop new land, but can adjust plot ratio, rebuild or change the non-residential land into residential land to reach it, such as increasing the plot ratio of Kowloon Tong from 0.6 times to 6 times, leading the housing supply to increase immediately.
Federal Reserve System (Fed) decreasing interest rate has little impact.
Shi Yongqing mentions, although the Fed cut interest rates, but the overall impact on investors’ sentiment and market mentality is not significant. At present, the Hongkong InterBank Offered Rate (Hibor) is at a high level, reflecting that Hong Kong has little possible to follow the interest rate cutting, also there is no sign of capital outflow.
Overall speaking, he believes this interest rate cutting will not bring much benefit to Hong Kong property market, but the Federal Reserve will stop shrinking balance sheet, and Europe will be likely to "drain" its capital, so the capital will be more than before, leading capital flows into asset markets, which is good for the property market.
