Residential prices are supported by solid housing demand.
Mass housing prices have recorded a modest drop of 3% YoY in Q1, according to JLL’s Residential Market Monitor. This shows that the continuous fall in housing prices is more relaxed compared to the 14% YoY and 35% YoY decline in grade A office and high street shops, respectively, over the same period.
It also reflects resilient residential prices, albeit a drop in market activity, with home prices being supported by robust sales in the primary sales market. In addition, the first project launched since prohibition on group gathering, ‘OMA by the sea’ achieved a first-day sales rate of about 80% out of the 268 units launched.
In the land sale market, the four residential sites sold via government tender so far this year attracted an average of 14 bids per site. Meanwhile, the sole commercial site put up for tender this year in Kai Tak only attracted four bids and none met the reserve price.
However, head of research at JLL in Greater China, Nelson Wong warns about the downside risks in the residential sector. “With the latest unemployment rate reaching a ten year high at 5.2% and likely to increase further, the economic well-being of prospective buyers as well as owners will inevitably be affected. Housing prices may soften along with the weakening broader economy and other property sectors,” he said.
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