residential pc 0316
TRANSCRIPT
Hong Kong Residential Market9 March, 2016
Soft landing for home prices
No indicative signs of construction cost going down
Long term demand still beyond supply
Rise of interest rate may further defer
Anticipated 2% of rental growth should help partly counteract an expected
increase of 25-50 basis points of mortgage payment
Shortfall in housing supply Private homes completion (11,280 units) still below absorption rate (16,826
units) Supply starts picking up but still below historical average
Source: Rating and valuation Department, Colliers
Sales volume set to remain slow Weaken market sentiment Widen expectation gap between buyers and sellers Resulted in lower transaction volume
Source: Land Registry
Record-low in Feb 2016:1,807 units
The turning point
Source: Rating and valuation Department, Colliers
2016
Mass -10%
Luxury -15%
Down-cycle in 2016 (1) Potential US interest rate rise (2) New supply on the rise
As of Jan 2016(since peak in Sep):Mass
8.9%Luxury 4.6%
Residential market remains optimistic
Land sale shows strong interest of mainland developers
Medium to long term still positive
Lowest sales volume in 25 years, only 1,800 transactions in Feb
compared to long term average of 7,600
Are we at the bottom?
Mass market continues to be soft, so far drop by 4% YTD
2nd hand luxury market still 15-20% price gap
Too early to relax cooling measures
Q & A