2024-04-25 28Hse Editor
The fifth wave of the new crown epidemic and geopolitics affected the residential property transactions in Hong Kong in the first quarter. Cushman & Wakefield estimated yesterday that the total number of residential property transactions in the first quarter of this year is expected to fall to 9,187, a year-on-year decrease of 49%, and the overall property price is expected to drop by about 5% during the quarter. The bank also pointed out that if the epidemic prevention measures are relaxed in the next three months, the property market is expected to regain momentum in the second half of the year, and it is predicted that property prices will increase by no more than 3% year-on-year for the whole year.
Penny real estate prices fell more than 5%
Chen Jianheng, Director of Cushman & Wakefield and Head of Hong Kong Research, said that, driven by the lack of new listings, the transaction volume has been on a downward trend since the 4,275 transactions recorded in January. It is expected that the transaction volume will continue to decline to about 2,000 in March. The number of property sales and purchase contracts is expected to be only 9,187, the lowest since the outbreak of the epidemic in early 2020, and a year-on-year decline of 49%.
In terms of property prices, Li Jianming, director of the bank's Hong Kong valuation and consulting services department, said that the second-hand market was hit by the epidemic, and the overall property price fell by 2.2% from the high in September 2021. Comparing various markets, City One Shatin, which represents the penny market, fell by 5.2% quarter-to-quarter; while Taikoo Shing, which represents the mid-price market, fell by 4.9%. Bel-Air, which represents the luxury property market, was relatively volatile, down 4.1% quarter-on-quarter, mainly because luxury property owners generally have a higher holding capacity.
The epidemic is the key for the next three months
Chen Jianheng said that the development of the epidemic in the next three months will be very critical to the future development of the property market. If the epidemic is brought under control before the middle of the year, and the Financial Secretary announced earlier in the budget to relax the ceiling on the property price for high-percentage mortgages , the property market is expected to recover in the second half of the year. Full-year volumes are expected to fall between 15% and 18%. The decline in property prices in the first half of the year is expected to offset the increase in the second half of the year. Therefore, it is predicted that the property price will increase by no more than 3% year-on-year by the end of the year.
In addition, according to the latest information from the Meridian Mortgage Referral Research Department and the Hong Kong Mortgage Corporation Limited, the number of newly approved mortgage insurance scheme loans in February was 2,460, a decrease of 961 or 28.1% from 3,421 in January; the amount was 136.15 RMB 100 million, a decrease of RMB 5.282 billion or 28% from RMB 18.897 billion in January. The number and amount of cases both fell for three consecutive months, and also hit a new low in two years. The number of new loans drawn under the Mortgage Insurance Scheme in February was 1,327, a decrease of 344 or 20.6% from 1,671 in January; the amount was 7.323 billion yuan, a decrease of 2.045 billion or 21.8% from 9.368 billion in January. The number and amount both hit a one-year low. Cao Deming, chief vice president of Meridian Mortgage Referral, said that in February, the number and amount of newly approved and newly drawn mortgage insurance dropped significantly, which is believed to be mainly affected by festivals and the epidemic. Affected by the epidemic, first-hand sales have slowed down, and the market has a strong wait-and-see atmosphere. It is believed that the number of mortgage guarantees will still have a chance to fall in the next two to three months.
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