Scrapping Hong Kong property curbs would be welcomed, but not sufficient to fix what ails the flagging sector: analysts
- Rolling back cooling measures in place since the early 2010s is likely to boost home prices, analysts say
- But ‘with the bulk of unsold stock amid high financing costs, pricing in the short term will still be under pressure’, says JLL senior director
An improved economy, a better jobs outlook and a turnaround in stock market performance are also needed to boost homebuying confidence and sentiment in the city, they said.
“We believe that the best timing to relax the measures has been missed, but scrapping all of the measures could potentially lift market sentiment [and] transaction volume, and let the free-market mechanism adjust itself,” said Cathie Chung, senior director of research at JLL. “However, with the bulk of unsold stock amid high financing costs, pricing in the short term will still be under pressure.”
Property prices in the city typically mirror the movement of the stock market, albeit with a lag of several months. So far this year, the bellwether Hang Seng Index is down 13.76 per cent. Policies to promote initial public offerings and revive the market could potentially help to improve sentiment in the property sector, Chung said.