New wave of migration unlikely to impact housing prices: JLL

Hong Kongers movement out of the city will have minimal impact on prices.

The new wave of migration in Hong Kong will have a minimal impact of the rising housing prices, property consultant JLL said.

In its Hong Kong Residential Sales Market Monitor, JLL noted that a new wave of migration is seen after a rise in the benefits withdrawal from the Mandatory Provident Fund in the third quarter of 2020.

The number of cases of withdrawal due to permanent departure from Hong Kong rose to 8,100 during the quarter, higher than the quarterly average of 7,600 in 2019.

"While a higher level of migration may be unfavourable to residential prices, the negative effect is likely to be minor as it is insufficient to turn around the current predicament of severe supply/demand imbalance,” Nelson Wong, head of Research at JLL in Greater China, said.

“Therefore, we expect the housing prices will stay firm amid the recent increase in migration numbers.”

JLL also noted that based on recent observation in the pre-1997 period, concerns over a higher pressure on prices will arise from the migration will be unlikely.

Citing a news report, JLL said that between 1985 and 1997, mass residential prices rose by an average of 19.6% year-on-year when 576,000 Hong Kongers emigrated

Amidst the pandemic, the JLL residential index shows that mass residential capital values rose 0.2% in 2019 and dropped only 1.6% in 2020, despite a 6.1% GDP contraction for the year and an unemployment rate that reached 7.2%.