Citi Real Estate Survey: The number of "light friends" in the real estate market is the first in more than half a decade
The property market continued to decline, and the public became increasingly pessimistic about the market outlook. Citibank released a real estate survey yesterday, showing that as many as 51% of the respondents believe that property prices will fall in the next year, which is double the 25% in the same period last year. A new record for nearly a decade. The survey also revealed that more than 40% of people seriously consider the possibility of buying a haunted house, and more than 70% of them think that the discount should be 30%. As for the higher level of acceptance of the haunted house, more than 60% of the respondents would consider it. Citigroup predicts that the current market downturn will not end until the second quarter of next year. Property prices may drop by 10% from now to the second quarter of next year. During this period, the real interest rate will rise to 4%. The government may "reduce the heat" next year. ◆Hong Kong Wen Wei Po reporter Yan Lunle
The decline in the property market has intensified in recent months, and citizens' home buying preferences have also undergone a major shift. For the first time, "Danyou" has fully dominated the market. In September, Citibank conducted a survey on citizens’ intentions to buy homes, randomly interviewing more than a thousand people. The respondents who are optimistic about the property market dropped sharply from 38% in the same period in 2021 to only 12% at the latest. Instead, the proportion of respondents who are not optimistic about the property market has increased significantly from 25% last year to the latest 51%, which is an astonishing year-on-year increase. It is the first time in the report that in the past 10 years, more than half of the respondents are bearish on the property market.
Citi expects property prices to fall another 10%
Li Guizhuang, head of retail banking at Citibank, pointed out yesterday that the economic pressure due to the epidemic, coupled with rising mortgage interest rates has increased the mortgage burden and the difficulty of mortgage stress testing, directly affecting the needs of users and investors in the property market, which will inevitably have a negative impact on property prices. Negative impact, it is reasonable for respondents to be more bearish on the property market. According to the bank, property prices in Hong Kong have fallen by 10% since the peak in August last year, and have fallen by 10% since October this year, and are expected to fall by another 10% in the second quarter of next year.
Li Guizhuang estimated that the pace of interest rate hikes in the United States has not stopped, but the rate of interest rate hikes may be moderated as inflation slows down. The next two interest rate hikes may be narrowed to 0.5%, and then lowered to 0.25%. It stopped at 5.25% to 5.5%, and the interest rate in Hong Kong is expected to continue to rise. It is estimated that the interest rate will be raised by 1.125% next year, which is a cumulative increase of 1.5% compared with that before the interest rate hike in September this year. The actual mortgage rate will rise in the second quarter of next year. to the 4 percent level.
Citizens tend to be hesitant about home ownership
In the down market, when asked whether it is a good time to buy a property, the report shows that as many as 16% of the respondents think it is a good time, which is a four-fold increase compared to the same period last year, and it is the highest record in the past 10 years. However, it is worth noting that the proportion of respondents who are interested in buying a property has only slightly increased from 13% last year to the latest 15%, reflecting that the respondents are hesitant to buy a property and tend to "don't buy at a loss". For this group of potential homebuyers, more than 60% expect property prices to fall further to an ideal level before buying a home, with an average expectation of a drop of 17%.
In addition, the report also asked about their interest in buying a haunted house, and more than 40% of respondents believed thatReally considering the possibility of buying a haunted house, more than 70% of the respondents think that the discount should be 30%; as for the acceptance level of the same level of the haunted house, more than 60% of the respondents would consider it, and the number of people who think that the discount should be 30% drops to nearly 40% .
Li Guizhuang pointed out that the monthly average number of transactions in the property market fell by 30% this year, and the public is currently adopting a wait-and-see attitude. However, Hong Kong’s economy is expected to recover next year and grow by 2.8%. Coupled with the decline in inflationary pressure and unemployment rate, the government does not want property prices to increase. The decline has led to an increase in negative assets. It is expected that the government will have the opportunity to relax the property market in the budget to stimulate demand. The maximum possible removal of 15% ad valorem stamp duty will allow parents to help their children buy properties.
32% of parents are willing to sponsor their children
As for those who need to buy a home, they accounted for 14% of the respondents, and the estimated population of Hong Kong is estimated to involve 588,000 people. In addition to property prices and actual needs, parents’ sponsorship for their children’s home purchases has become the third reason. Among the respondents who are parents, 32% are willing to sponsor their children’s home purchases, and 41% of them are willing to subsidize between RMB 1.01 million and RMB 2 million. And 63% of the respondents believed that the property price that meets the actual needs is 6 million yuan or below. Worries about the interest rate hike cycle and hot moves have affected 30% of the respondents' desire to buy a home.
It is worth noting that the report indicates that people of different age groups tend to use high-value mortgages, and more than half of the bank's customers use mortgage insurance plans. However, Li Guizhuang pointed out that the bank has not seen any special defaults or payment problems under the stress test. In view of the diversification of investment products in recent years, the report asked the respondents for the first time whether buying a property is better than other investments in the long-term. age group, only 39% agree with this point.