| Will the Coronavirus Affect Hong Kong’s Property Prices? |
2020/05 |
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| Low interest rates remain a significant consideration in buyers’ minds, since it makes home ownership more affordable and more attractive than renting over time. With average sales prices having only fallen ~7% since the onset of the protests (as of February 2020 data), this points to a general resiliency and confidence in the long-term outlook. In addition, the US Federal Reserve’s recent move to cut interest rates to near zero percent coupled with the reset of HIBOR to around 1.73% (as of March 19) will no doubt tempt potential homebuyers, even against gloomy macro-economic circumstances. This relative stability in prices is despite of the volume of buyers having dropped meaningfully since the protests began, with there being ~50% fewer monthly transactions of late. In other words, sellers have remained confident enough to not panic-sell, which would have led to much steeper price declines. |
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