Rent and property aren’t cheap in the 852… but is there hope?
Recently Hong Kong property prices dropping have been the talk of the town – but is it all just talk and speculation? Everyone is probably more concerned when the big moment is actually going to happen, but with all these different opinions by property experts, it’s hard to choose one to believe and follow through. JP Morgan plays it safe and claims that property prices are going to drop 5-10% in the next three years, but other experts like Bocom International Holdings analyst Alfred Lau is convinced that property prices could drop close to 20%! When in doubt, turn to cold, hard data – we asked the experts over at Spacious explain to us the three signs that Hong Kong property prices are dropping!
Hang Seng Properties Index dropping 15% has got everyone on edge
Economics 101: everything is interrelated in the finance world, which is why when the Hang Seng Properties Index dropped 15% this quarter, everyone got a little worried. Housing prices may have risen to an all-time high back in August, but the huge percentage decline in stocks may be a sign things are about to go south in the property sector. The last time the stock gauge was so low was back in 1998, when the property bubble burst in Hong Kong. There may be plenty of Hong Kong apartments for sale at the moment, but sales have definitely gone down, even on the Peak!
Russell Street is no longer the most expensive shopping street in the world
Hong Kong retail rents have been dropping in the past few months, even on Russell Street in Causeway Bay. What was once known as the most expensive shopping street in the world has been replaced by New York’s Fifth Avenue. In the end of June, retail rents went down 12% in Causeway Bay and 3% in Central. The drop in tourism may have affected this, but the decrease in retail rents is another clear sign that property prices may drop early next year.
Property investors are moving their focus to overseas property
Due to the unstable property prices in the city, according to CNBC, Hong Kong buyers are slowly moving away from investing in local property and instead focusing on overseas property. Security is a key concern when it comes to investments, which is why property buyers would rather invest in countries with more stable property prices.
So there we have it! You can never 100% predict what will happen in the next couple of years, but we would be pleasantly surprised to have a drop in our rent!
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