Two factors that could weigh on the property market

Rising interest rates is one.

One area of robust strength in the Hong Kong economy since Q416 has been the residential property market, and in BMI Research's view, the continued rise in house prices (despite cooling measures implemented by local authorities in November 2016) is worsening the affordability of houses in the territory.

"While it is difficult to accurately determine the exact timing of the correction, the market is likely to face several downside pressures, and we continue to expect a slowdown in the sector over the coming quarters. Other than worsening housing inaffordability, there are two other factors that are likely to weigh on the market. They are rising interest rates in Hong Kong (due to the US Fed rate hiking cycle and Hong Kong's currency peg to the USD), and the impending increase in housing supply," added BMI Research.