Bears on rise in home market
Economic worries and rising mortgage rates expected to push Hong Kong property prices down for at least a year, ending two years of stunning rises
Peggy Sito and Paggie Leung
SCMP Nov 09, 2011
Bulls are quitting the city’s housing market as the betting from analysts swings towards the view that home prices have entered a falling cycle that will last for at least the next 12 months.
Though opinions differ on whether the city has already tipped from a bull to a bear cycle, there is widespread agreement that prices could fall between 5 per cent and 20 per cent because of the rising cost of home loans and the economic concerns locally and abroad.
In the unlikely event that the Hong Kong economy suffers a hard landing, home prices could collapse by as much as 45 per cent, according to Barclays Capital Research.
“Clearly, the market is going through a period of soul-searching and undergoing a reality check, with many now sitting out the global turmoil and those that are buying dictating the level of pricing rather than the vendor,” said Nicholas Brooke, chairman of consultancy Professional Property Services.
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