Potential buyers will retreat on house buying.
Hong Kong’s unemployment rate has increased to 5.2% putting pressure on housing prices, according to JLL’s Residential Market Monitor. Unemployment rate rose progressively to a nine-year high by 3.1 percentage points (ppt) from 2.1% during the Asian Financial Crisis.
“As recession in Hong Kong deepens, higher unemployment will likely erode housing demand as some prospective buyers retreat, whilst more owners may choose to sell, tilting the market dynamics to favor buyers more,” said Nelson Wong, JLL’s head of research in Greater China.
Figures from JLL show housing prices fell by 50%, whilst unemployment climbs amidst the COVID-19 pandemic and social tension. With the recent continuous rise in unemployment, JLL’s mass residential capital value index has also dropped by 6.1%, from its peak in July 2019.
Amongst the major industries, retail, accommodation, and food services were hit the most, with the unemployment rate increasing by 2.7 ppt reaching 6.1% from 3.4% in 2019.
According to the Census and Statistics Department, the unemployment rate in the city has increased from 2.8% in June 2019 to 3.7% in February 2020.
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