Photo courtesy of Simon Zhu.

Developers to retain conservative pricing strategy for home prices: analyst

Demand has been focused on mass market projects.

Home prices in Hong Kong are expected to consolidate further as mortgage rates rise and the demand for new primary, second homes remains sluggish.

Prices have reportedly declined by about 8% year-to-date, according to DBS’ latest Hong Kong Property Sector Outlook report.

Developers in the city are expected to retain their conservative pricing strategy moving forward, said Jeff Yau, Hong Kong property sector analyst, group research, for DBS Hong Kong. The upward pressure from banks raising their mortgage rate caps and prime rates is also expected to damplen market sentiment.

Demand has been focused on mass market projects, said Yau.

ALSO READ: Property market ends downcycle 

“Primary market sales tumbled and were skewed towards mass market projects,” Yau said during a press briefing, adding that the secondary market was more sluggish.

Projects in Northern Metropolis reportedly continued to be sought after, whilst other mass market projects with good transportation links also sold well. 

More luxury projects are likely to go on sale if the border with Mainland China reopens, Yau noted.

Meanwhile, should prices of homes correct sharply, Yau and DBS said that the government might opt to relax cooling measures. 

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