As mortgage offers are aggressively cut by 90%.
While Hong Kong’s residential property prices remain the world’s third highest, it has been noted that 2015 has been a year of weak market sentiment.
According to a release from Colliers International, this has not only appreciably lowered sales transaction volumes, but also widened the expectation gap between buyers and sellers.
“With banks cutting home valuations and developers aggressively offering mortgages of up to 90%, many buyers are running the risk of falling into negative equity,” said Joanne Lee, senior manager, research and advisory.
Here’s more from Colliers International:
That said, the likelihood of a dramatic fall off following the present all-time high sales price levels is unlikely, as we only anticipate a 15% drop in 2016 (compared with December 1998 at 42.5%). We expect monthly transaction levels for 2016 to hold steady at the 4,000 to 5,000 mark,”
Luxury residential rents increased by 10% in 2015, the strongest growth since 2008, driven by the high occupancy. Due to the weakening business sentiment, multinational companies will remain cautious in hiring and the finance industry will likely be much more conservative with their housing allowances.
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