Hong Kong home prices: Citibank predicts U-shaped recovery, matches Morgan Stanley’s 5 per cent upside for 2023
- Hong Kong’s home prices will drop 5 per cent in the first quarter, before gaining 5 per cent towards the end of the year, Citi said in a report
- Property transactions in the city slumped to a 32-year low of 59,604 in 2022, 38 per cent lower than a year earlier, according to Centaline’s estimates
Citibank has joined Morgan Stanley in predicting a U-shaped recovery for Hong Kong’s home prices, with the reopening of the city’s border with the mainland to provide a much-needed boost.
Home prices in the city will drop 5 per cent in the first quarter of 2023, before gaining 5 per cent towards the end of the year, Citi said in a research report on Tuesday led by Ken Yeung.
“After a sharp drop in Hong Kong home prices, down 15 per cent in 2022, amid rapid rate rises, Hong Kong’s residential market is starting to see positive drivers that we think will lead to a bottoming of prices in the first quarter of 2023 and a U-shaped recovery,” the report said.
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The Centa-City Leading Index, a gauge of lived-in home prices compiled by Centaline Property Agency, meanwhile has declined 18.07 per cent since its peak of 191.34 in early August 2021.
Citi’s forecast came as property transactions nosedived to a 32-year low of 59,604 in 2022, 38 per cent lower compared with a year earlier, according to estimates compiled by Centaline on Tuesday. It is lower than the previous estimate of 64,000 by Midland Holdings.
