Hong Kong Residential Sales

Housing Investment Consultancy
Residential Sales

May 2019

Investment sentiment has been buoyed by the reviving stock market, negative real interest rates and stable affordability levels given the end of the current rate hike cycle.  Developers’ eagerness to deliver primary projects in both the luxury and mass markets should lead to a rebound in both volumes and prices in the near term.

Both luxury and mass residential prices rebounded in the first quarter of the year as sentiment revived.

The strong correlation between the performance of the local stock market and residential price movements over the past two decades means that the recent HSI rally might indicate the end of the short-lived residential market correction.

The end of the current rate hike cycle means that negative real interest rates and stable affordability will continue to support home prices.

The latest RVD forecast reveals steadily increasing housing supply over this year and next (around 20,000 units in each year), but the increasing proportion of ‘Nano flats’ (Class A units) highlights the trade-off between increasing housing supply and average living space.

Developers keen to deliver primary units should lead to a rebound in both home prices and volumes in the near term, but external uncertainties could cloud any meaningful recovery.

 

Key contacts

Simon Smith

Simon Smith

Senior Director
Research & Consultancy

Two Exchange Square

+852 2842 4573

 

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