Hong Kong's red-hot property market cools
For young Hong Kong residents like Wilson Leung getting a foothold on the city's property ladder has long been a near impossible task, but with the notoriously overpriced housing market facing a downturn, they now have a chance of realising their dream.
The crammed financial hub regularly tops the list of cities with the least affordable housing in the world, with even cheap apartments out of the reach of most regular workers.
However, after a decade of near continual growth Hong Kong is about to join a global downturn that is buffeting markets including London, Vancouver, Sydney and Shanghai.
And the good news for first-time buyers like Leung, who works in sales and lives with his parents, most analysts believe the trend will continue into 2019 as the China-US trade dispute rumbles on and the Chinese economy stutters.
Many analysts are predicting further dips, fuelled by the fallout of the US-China trade war, the slowing mainland economy, a weakening yuan and the prospect of further interest rate rises.
The Royal Institute of Chartered Surveyors (RICS) last month said property prices declined for two consecutive months while sales volumes have been down for four months straight, the longest losing streak since 2008 at the height of the global financial crisis.
Demand from buyers in mainland China, a cash-rich demographic that has been a key driver of the bubble, much to the frustration of Hong Kong residents, has also been negative for the past four months.
"Against this backdrop, expectations for prices and sales volumes remain firmly rooted in negative territory over the next three months and 12 months," RICS wrote.
Iris Pang, ING's Greater China economist, said residential prices have fallen by as much as 15% in some areas. She said jitters over the trade war were having the most significant effect given the "potential impact on the Hong Kong economy, including job security, wage growth and asset price trend in general".
"This makes the market sentiment negative currently, and will continue to be so unless we see significant progress from the trade truce," she told AFP, predicting a further 10-15% drop in prices in 2019.
Until recently, the financial hub's property has provided handsome returns for the wealthy as prices have doubled since 2008. - Nampa/AFP
The crammed financial hub regularly tops the list of cities with the least affordable housing in the world, with even cheap apartments out of the reach of most regular workers.
However, after a decade of near continual growth Hong Kong is about to join a global downturn that is buffeting markets including London, Vancouver, Sydney and Shanghai.
And the good news for first-time buyers like Leung, who works in sales and lives with his parents, most analysts believe the trend will continue into 2019 as the China-US trade dispute rumbles on and the Chinese economy stutters.
Many analysts are predicting further dips, fuelled by the fallout of the US-China trade war, the slowing mainland economy, a weakening yuan and the prospect of further interest rate rises.
The Royal Institute of Chartered Surveyors (RICS) last month said property prices declined for two consecutive months while sales volumes have been down for four months straight, the longest losing streak since 2008 at the height of the global financial crisis.
Demand from buyers in mainland China, a cash-rich demographic that has been a key driver of the bubble, much to the frustration of Hong Kong residents, has also been negative for the past four months.
"Against this backdrop, expectations for prices and sales volumes remain firmly rooted in negative territory over the next three months and 12 months," RICS wrote.
Iris Pang, ING's Greater China economist, said residential prices have fallen by as much as 15% in some areas. She said jitters over the trade war were having the most significant effect given the "potential impact on the Hong Kong economy, including job security, wage growth and asset price trend in general".
"This makes the market sentiment negative currently, and will continue to be so unless we see significant progress from the trade truce," she told AFP, predicting a further 10-15% drop in prices in 2019.
Until recently, the financial hub's property has provided handsome returns for the wealthy as prices have doubled since 2008. - Nampa/AFP
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