City’s growing job market and increasing wealth help drive real estate demand while supply rises slowly.
Hong Kong home prices will rise another 15 percent in the next 12 months as limited supply forces buyers to pay more for property that’s already expensive, CLSA Ltd.’s Nicole Wong said.
Prices will increase because the city’s promising job market and growing wealth will help drive demand for real estate while supply doesn’t increase much, Wong, the regional head of property research for CLSA, said at a media briefing in Hong Kong on Monday.
“Is Hong Kong real estate too expensive? Definitely,” Wong said. “People who buy are making a painful trade. However, those who make a rational choice not to buy find themselves getting penalized because prices keep going higher. So in the end, they’ll go for a less rational choice because it’s less painful.”
Hong Kong’s real estate prices have been fueled by record- low mortgage costs and buying by mainland Chinese. The city’s home prices have risen 11 percent this year and are up 42 percent since early 2009, according to Centaline Property Agency Ltd. Last month they rose to the highest level since 1997, when the market peaked, according to Centaline, one of the city’s biggest property agencies.
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