Posted on 19 January, 2021 | By Property852
Hong Kong apartment prices are heading for their first drop in 12 years and are attracting interest from bargain hunters. The best value will be found in housing estates that cater to middle income earners.
An increasing number of people are departing Hong Kong and more people are being made redundant from multinational companies meaning that property is currently a buyer’s market. This could also ensure that luxury property prices are also brought down.
According to the official data Hong Kong apartment prices changed very little in the first eleven months of last year. However later this month when December’s data is available it is expected to show a decrease large enough to bring the average of the whole year down.
Bargains will not be available for long as prices may bounce back later in the year depending on how successfully the new vaccines get the pandemic under control.
Financial Secretary Paul Chan Mo-po said over the weekend that Hong Kong could exit its worst ever recession this year. If Coronavirus vaccines work as expected then properties with larger discounts will be seen as bargains and help the market to bounce back even faster.
The Hong Kong property market has been through four periods of depression over the last forty years caused by the 1998 Asian Financial Crisis, the 2001 dot-com bubble bursting, the 2008 subprime mortgage crisis and now the current global pandemic.
The luxury home market is also hit due to job losses in industries such as tourism, catering and air travel.
In November Hung Hom based housing estate Whampoa Garden experienced it rent sink by 15.8% to HKD 34 / sq ft. That represents the largest drop amongst the ten main housing estates in Hong Kong. Ap Lei Chau based estate South Horizons saw a drop of 8.7% and Island East based housing estate Heng Fa Chuen had a price drop of 8.4%. From Jan – Nov 2020 the same three housing estates saw a collective drop of 11.5%.
Many experts remain optimistic that there will be a marked improvement later this year. If the pandemic is gotten under control then some predict a 3-5% increase in property prices.
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