Mass residential prices to decrease 5%: JLL
This is due to the dampened sentiment in the first quarter of 2022.
Mass residential prices are seen to drop around 5% this year on the back of the dampened sentiment in the first quarter (Q1) of 2022, real estate services firm, JLL Hong Kong, said.
In a statement, JLL’s Hong Kong residential sales market monitor revealed that the current mass residential prices went down by 3.2% quarter-on-quarter (QoQ) in Q1 2022 which was driven by the fifth wave of COVID-19.
It then downgraded its forecast for 2022 mass residential market capital values to decrease 5% compared to its previous forecast that it would rise 0% to 5%.
Despite the decrease in mass residential capital values, JLL Hong Kong Chairman Joseph Tsang said he expects the activity level in the housing market to recover to a high level similar to last year due to pent-up demand from potential buyers.
“Driven by pent-up demand, potential buyers will support the housing market upon the relaxation of social distancing measures,” he said.
“Judging from the high volume of private residential units pending for pre-sale consent approval, we expect a high concentration of launches in the second half of 2022, with potentially over 20,000 units to be issued with pre-sale consent in the year, similar to the previous peak in 2018. Combined with the factor of increasing interest rates, housing prices will be under pressure," Tsang further explained.
Data from Land Registry showed that residential sales volume posted the lowest level in two years at 10,056 deals in Q1 2022, a drop of 33.8% QoQ.
Most developers sought to postpone new launches after restrictions in January became stricter which resulted in lowered market activity and dampened sentiments.
With this, sales transactions in the primary market logged a more drastic drop of 63.2% QoQ, compared to the decline of 20.8% in the secondary market.