Property

REA Group 2018 Survey Results

REA Group ‘2018 H1 Hong Kong Property Market Perspective Survey' Results

REA Group Survey event

(1) Property value is perceived to keep increasing

  • 95% of respondents believe that the current residential property values are too high with only 5% think that the property prices are reasonable. In addition, 69% of respondents expect that residential property value will continue to rise in the next six months, with an expected average percentage increase of 8%, while 24% of respondents expect it to maintain; only 7% expected residential property values to fall in the next six months, the expected average percentage price decrease by 13.9%.

(2) Unaffordability limits purchase desire and choice of property

  • 27% of non-property owners cite they would not be able to afford a property in their lifetime; 16% have no plans to purchase residential properties in Hong Kong. In addition, 24% of non-property owners in Hong Kong expect to be able to purchase properties when they are between 30-39 years old; 18% expect to be 40-49; 8% expect to be 50-59; 4% expect to be 60 or older. Only 3% expect to be able to purchase properties in Hong Kong before the age of 30.
  • Among the respondents who plan on purchasing property in Hong Kong, 91% expected the source of a down payment would be from personal savings; 43% from investment, 36% from parents’ savings, and 28% from bank loans. In addition, 56% of respondents expect the size of their first unit to have a saleable area between 200-499 square feet; 33% expect it to be 500-799 square feet; and 6% expect it to be between 800-999 square feet.
  • 48% of the respondents stated that they would consider buying a “nano flat” (a unit with a saleable area of less than 200 square feet) as long as the price is reasonable, of which 30% will consider their nano flat purchase for self occupation and the 25% for investment purposes.

(3) Long-term plans are also affected

  • 55% of unmarried respondents believe that high property prices have an impact on their marriage plans (such as delaying their marriage plans until they can afford to purchase their own property). Among them, 25% think that the impact is very large; 30% think that there is quite an impact. Among 62% of unmarried respondents who think it has a high impact on their marriage plans are aged 35 or younger.
  • Among the unmarried respondents who think high property prices have an impact on their marriage plans, 57% will consider renting a flat instead of purchasing their own property in Hong Kong; 34% will consider moving out of Hong Kong; 28% will consider living with parents/spouse’s parents (regardless of whether or not to renovate the old flat); 8% will consider sharing a flat with other families.

(4) Global economy has an impact on the property purchase journey

  • 30% of respondents think that they will consider investing in overseas properties as the economy of countries, such as the United States and Europe, improves. Among the 30%, 6% believe that investing overseas will be much more likely; 25% believe it will be a bit more likely if the economy improves.
  • If the United States increases interest rates and other markets follow, 35% of respondents stated that they will be less likely to purchase property in Hong Kong, of which 18% said a bit less likely and 17% said much less likely.

(5) Appeal of new property initiatives is lukewarm 

  • 35% of respondents found the new initiative of “over 20,000 new property units available in 2018” to be appealing. The reasons behind the appeal were: more supply (25%), decrease in market price (12%), more choices (11%) and an increase in the chance of purchasing properties (9%).
  • 38% of respondents found the new initiative of “new housing schemes (e.g. GHS, Interim scheme) to be appealing. The reasons behind this were: lower price (23%), increase in the chance of purchasing properties (14%), more choices (4%), more reasonable price points (4%) and affordable/can afford this price (4%).
  • 38% of the respondents found the “Starter Homes Scheme” to be appealing. The reasons behind this were: lower price (21%), increase in the chance of purchasing properties (12%), discounted price (5%) more supply (4%), and affordable/can afford this price (4%).


REA Group Sentiment Survey results

(6) Intention for buying local residential property is low

  • 29% of respondents would consider purchasing properties in the next 12 months, of which 20% would consider purchasing in Hong Kong and 71% do not have any purchase plans. Respondents’ barriers to property purchase in Hong Kong include price points too high (93%), limited loans for down payment due to restrictions by mortgage (21%) and affected by other property related policies (16%).

(7) Reasons for property purchase in the past 12 months is equally split between self-occupation and investment

  • 47% of respondents who purchased property in the past 12 months said that their purpose was for “self-use” (including preparing to give birth). The reasons included improved personal financial condition (48%), preparing for marriage (33%), moving to a bigger unit (30%), preparing for giving birth (21%), moving to a more convenient location (18%) and moving to a location with a better school network (5%).
  • 46% of respondents who purchased property in the past 12 months stated that their purpose was for “investment”. Among the conditions considered were location of property (34%), property resale value (33%) and rental rate of return (24%).
  • 7% of respondents who purchased property in the past 12 months said that the purpose was for “ future usage by children”. The reasons for this include in case future property prices are too high for children to afford (8%) and preparing for their children’s marriage (5%).
  • Median budget for respondents who purchased property in the past 12 months was HK$7,820,000.

(8) Property purchases in the next 12 months skewed towards self usage

  • 49% of respondents considering purchasing their next residential property in the next 12 months indicated that the purpose was for “self-use” (including preparing to give birth). Among the reasons were improved personal financial condition (41%), moving to a bigger unit (31%), moving to a more convenient location (25%), preparing for marriage (21%), preparing to give birth (12%) and moving to a location with a better school network (6%).
  • 41% of respondents considering purchasing their next residential property in the next 12 months indicated that the purpose is for “investment”. Conditions considered include location of property (34%), property resale value (33%) and the rental rate of return (24%).
  • 10% of respondents considering purchasing their next residential property in the next 12 months said that the purpose of the next purchase is for “future usage by children”. The reasons for this include in case future property prices are too high for children to afford (13%) and to prepare for their children’s marriage (10%).
  • Median budget for respondents considering purchasing their next residential property in the next 12 months was HK$6,540,000.

(9) Interest for overseas property purchase is positive

  • 29% of respondents would consider purchasing properties in next 12 months (including overseas and locally), while 71% did not have any purchase plan.
  • 14% of respondents plan to purchase properties overseas in the next 12 months due to good investment value (58%), property price in Hong Kong is too high (38%), good value for money (36%), to generate an income from a buy-to-let property (32%) and as a vacation home (28%).

(10) Japan and Thailand are emerging as new contenders when purchasing overseas property 

  • Countries considered for next property purchase for the next 12 months include Mainland China (42%), Japan (26%), Thailand (19%), Australia (17%), Taiwan (15%), Canada (12%) and United Kingdom (12%). Budget for planned spending averages HK$3,920,000.
  • Property types considered for next property purchase for the next 12 months include apartment/flats (80%), detached houses (28%) and semi-detached houses (23%).
  • 60% of respondents who has overseas ownership hold properties in Mainland China, which includes Shenzhen (25%), Guangzhou (21%), Dongguan (16%), Zhongshan (8%) and Foshan (7%).
  • Excluding Mainland China, 9% of respondents who has overseas ownership stated that they hold properties in Canada, 6% hold properties in Australia, Taiwan and the United Kingdom, 4% in Japan and 2% in Thailand.