Nearly 40% of respondents expect property values to pick up in the next six months. Buyers’ appetites remain steady amid virus outbreak.
Property platform squarefoot.com.hk (Squarefoot), today announced the results of its 2020 Q3 Hong Kong Real Estate Market Outlook Survey. The results show that nearly two in five respondents (39%) think that property prices will pick up in the next six months, reflecting a more optimistic attitude towards the property market compared to the previous quarter.
The online survey, conducted in late June 2020 and involving 500 Hong Kong citizens, reflected quite polarised views about the housing market. While 39% of respondents expect an average growth of 9.4% in home prices in the next six months, 22% anticipate an average drop of 11.2% within the same time period. Results from the two previous surveys (conducted in December 2019 and April 2020) showed that only around 11% of respondents forecasted an increase in property values, with more than half believing they were likely to decline in the six months following the survey.
The new survey results reveal that the proportion of respondents who believe property values have reached their peak in the past 12 months has dropped from 47% to 34% since the last survey. When looking into the drivers of a potential rise in home prices, respondents ranked ‘Demand for residential property is still high’ (65%), ‘Housing market will still rise in long term’ (57%) and ‘COVID-19 outbreak is alleviating and the economy is starting to revive’ (49%) as the top three factors.
Homebuying desire remains steady, with buyers’ appetite for purchasing residential property in the next 12 months dropping slightly in Q3 (24%) compared to the Q2 findings of 26%, but still reflecting an increase from 2019’s figure. More than half of the respondents (52%) agree that the political environment will have an impact on their purchasing decisions. Among those intended homebuyers, 43% claim they will slow down, suspend or cancel their plans to make a purchase, which is 5 percentage points less than the overall respondents (48%). Nonetheless, 26% of intended buyers said they will accelerate their plans to make a purchase, which revealed a higher proportion compared to overall respondents (10%). This shows that a portion of intended homebuyers even forge ahead with their purchase plans.
Commenting on the survey results, Kenneth Kent, General Manager, squarefoot.com.hk said, “The survey fieldwork was conducted when the outbreak was showing signs of alleviating. Although 83% of respondents still think current property prices are too high, 39% of respondents predict housing values will rise in the next six months, which demonstrates a reversal of expectations from the previous two surveys. We didn’t see any significant correction in real estate prices due to the COVID-19 pandemic in the first half of 2020, which might represent buyers’ confidence in the outlook for the market.”
He continued, “The outbreak has led to a surge in overall online property information platform usage. According to Squarefoot’s data, we have seen enduring growth in website traffic across the first six months of 2020, with site traffic and property listing enquiries increasing by 26% and 42%, respectively, compared to the previous quarter.”
The survey also discovers that 91% of intended buyers have looked for properties online during the pandemic, while 93% indicate that they will continue to acquire property information online even after the outbreak.
Respondents have also shown a mixed view on the rental market. 24% of surveyed tenants believe that rental values will drop in the next six months, with an average forecast decrease of 13.6%, while 26% of them anticipate rental values going up by 11.5%, on average.
This quarter’s survey also gauged respondents’ views on moving abroad. Mandy Tam, Senior Director of Consumer Insights, Nielsen Hong Kong said, “Nearly half of the respondents (48%) claimed to have plans for moving abroad, ranking ‘Better political environment’ (59%) as one of their top triggers, followed by ‘The way of life abroad suits me more’ (48%) and ‘Lower cost of living’ (47%). Taiwan (34%), Australia (29%), and the United Kingdom (21%) were among the most preferred destinations for migration. While mainland China (34%), Australia (21%), and the United Kingdom (21%) were ranked as the top locations to purchase property outside of Hong Kong. There’s a surge of 14 percentage points in respondents who chose Australia and the United Kingdom, respectively.”.
Squarefoot commissioned leading measurement and data analytics company Nielsen to conduct the 2020 Q3 Hong Kong Real Estate Market Outlook Survey. Feedback was collected from 500 respondents aged 18 to 65 through an online questionnaire during the fieldwork period of 18-29 June 2020. The survey aims to understand the perceptions of the Hong Kong public towards the local and overseas property markets and explore their purchasing behaviour. The margin of error of the survey is 4% at a 95% confidence interval.