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Around 300,000 households will be in the market, exceeding expected supply, the lender estimates
December 13, 2024 | Staff Reporter | Hong Kong | Property Management
One in six Hongkongers is considering purchasing a home in the next five years and a third of those prospective buyers are entering the market for the first time, a survey by HSBC found. Given the city’s population, HSBC estimates the number of prospective residential real estate buyers at 300,000 households. This means housing supply will fall short of expected demand, as the government aims to supply 132,000 private units and another 123,000 public units to the market over the next decade, according to HSBC.
Of the individuals who said they would be likely to purchase a home, two-thirds already owned real estate, the survey of 3,170 Hong Kong residents aged 18 to 65 found. And among those looking to buy a second property, 72 per cent said they were motivated by investing and earning passive income, while about 31 per cent of the first-time buyers were also driven by investment goals.
Increasing Sales
Hong Kong recorded 6,298 new and lived-in home sales in November, the most since April and the second-highest total this year. The improved sentiment came after an initial half-point reduction in interest rates in the city in September, followed by the easing of mortgage rules for homebuyers and investors in October.
“Recent trends show improved sentiment in the market, aligning with our survey findings, which were conducted after the first interest rate cut in September but before the government’s easing of property cooling measures,” said Sidney Massunaga, Head of Retail Products, Wealth and Personal Banking at HSBC Hong Kong. “The second rate cut of the year, announced in early November, is expected to further stimulate interest in property purchases.”
The rate cuts have brought borrowing costs at Hong Kong commercial banks to their lowest level in two years. That lightened the monthly burden on mortgage borrowers by about HK$709 (US$91) to HK$22,803, according to local mortgage broker mReferral, based on a typical HK$5 million, 30-year loan.
Recent trends show improved sentiment in the market, aligning with our survey findings, which were conducted after the first interest rate cut in September but before the government’s easing of property cooling measures. The second rate cut of the year, announced in early November, is expected to further stimulate interest in property purchases.
Sidney Massunaga, Head of Retail Products, Wealth and Personal Banking at HSBC Hong Kong
However, rising geopolitical tensions and concerns about a slower pace of interest-rate reductions soured the market, with sales of new flats slowing noticeably from mid-November onwards and the secondary market also recording subdued activity, according to Ricacorp Properties.
Developers including CK Asset Holdings, Wharf Holdings and Sun Hung Kai Properties (SHKP) secured approval in November for sales covering 5,521 new residential units in 10 projects across districts such as Tseung Kwan O, Tai Po and Kai Tak, the Lands Department said on Thursday.
Meanwhile, sales of another 12,350 units across 20 projects are awaiting application approval. Built by SHKP, Swire Properties, Wheelock Properties, Henderson Land and CK Asset, among others, the projects are in areas including Yuen Long, Fanling and Chai Wan, according to the department.
Sentiment in Hong Kong’s real estate market turned neutral in October, according to the latest survey by the Royal Institution of Chartered Surveyors and property listing portal Spacious. The survey’s headline confidence index came in at plus two in October, similar to but less emphatic than the plus six observed a month earlier.
Survey participants mentioned a slow economic recovery and Donald Trump’s policies towards China as concerns dampening sentiment.
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