People’s interest to buy house increases while the confidence of mortgage repayments declines.
(By Yan Lunle)
The property market has rebounded again, and the public attitude on the outlook of the market reverses. Citibank's latest report shows, the proportion of respondents who believe property prices would rise in the next 12 months increased from 18% in the fourth quarter of 2018 to 42% in the first quarter of 2019. Citizens are more interest in purchasing houses, accounting for 26%, an increase of 8% from the previous quarter, and the ratio reached a new high. Among them, young and unmarried people have the highest desire to buy houses. However, facing the rising property prices, the public confidence in their afford ability weakened, and the proportion of people who believe current period is not a good time to buy house is still 57%, accounting for the majority.
Citibank commissioned the University of Hong Kong's Social Science Research Centre to visit more than 500 Hong Kong citizens in March this year in a random sample telephone interview. The survey results were announced yesterday and found that, people’s view of the market outlook reversed in the first quarter, and the proportion of respondents who believe Hong Kong property prices would rise in the next 12 months increased from 18% in the fourth quarter of 2018 to 42% in the first quarter of 2019, up by 24%. On the other hand, the proportion of respondents who believe the property prices would fall greatly reduced from 57% to 24%.
The eases of Sino-US trade wars and interest rate hikes stimulus property market to rebound.
Citibank believed, the market was dominated by negative factors in the second half of 2018, including Sino-US trade wars, interest rate hikes pressure, and the depreciation of the RMB. Looking at the Centa-City Leading Index (CCL), property prices had fallen for five months at that time, from 188.64 points in August last year, to a lowest of 169.95 points, a drop of nearly 10%. However, with the Sino-US trade war is easing, the United States announced that it would not raise interest rates this year and etc., since the beginning of February, CCL has rebounded to the latest 183.19 points, a rise of 7.8% in the past three months, approaching to the historical highest record.
Citibank analyzed, the market has gradually adapt to the relevant effects recently, and the citizens also turned to optimistic on property prices trend. Although citizens expected property prices would rise in the future, but the respondents' interest in house purchasing increases. In the first quarter of 2019, 26% of respondents indicated that they were very interested in or interested in home purchasing, and the proportion reached a new high.
Young singles are the most eager to buy houses.
Among the respondents aged 21 to 29, 37% said they were very interested or interested in home purchasing, up nearly one-third from 19% in the fourth quarter of 2018. A large number of respondents aged between 30 and 44 also expressed they were very interest or interest in their home purchasing. The survey also showed, 31% of unmarried respondents were very interested or interested in home purchasing, reflecting young and unmarried people were more eager to buy a home among the respondents in different groups.
The director of retail banking at Citibank, Li Guizhuang expressed, although the survey results show that the public view on the property market has reversed, but it is inevitable that the confidence of their home afford ability will weaken in the expectation that property prices will rise. The survey shows, the proportion of respondents who believe current period is not a good time to buy homes has dropped from 67% in the fourth quarter of 2018 to 57% in the first quarter of 2019, which is still the majority, reflecting many people still decide to wait and see facing the high property prices, although they want to buy their own homes.
Morgan Stanley predicted the property prices would rise by 10%.
In recent months, many brokers look good to the property market, and some of them even reverse the prediction to rise from down. Morgan Stanley also joined the optimists group yesterday, who rose the prediction of the annual property prices increase from the original 2% to 10% and expected the real estate stocks will beat the Hang Seng index. The Morgan Stanley pointed, the dove faction attitude of US Federal Reserve, improved market sentiment and reduced residential supply all make their view of Hong Kong property prices and sales prospects more optimistic than in the beginning of the year, so they raised the forecast for the annual property price increase.
Morgan Stanley predicted the sales of first-hand property to increase by 20% this year, while the previous prediction was 10% of up range. The rank of promising properties are still residential, office buildings and then retail properties. The company pointed, as developers will launch several new projects in the second quarter in succession, it is expected that real estate stocks will once again outperform the leading market, so they rose the target price prediction of Hong Kong property stocks also the retail property stocks both by an average of 8%. The company currently prefers residential-based property stocks, followed by commercial buildings and retail rentals stocks.
