Hong Kongers Grow Pessimistic on Residential Market: Citi Survey

Just 13 percent of Hongkongers polled by Citi say it’s a good time to buy a home, down from 16 percent a year ago, the global bank said Tuesday.

The latest figure, based on data from 1,100 respondents in September, is still an improvement on the 4 percent seen two years ago during the COVID crisis and marks the second-highest reading of the past 11 years, according to the 2023 Citi Residential Property Ownership Survey.

But the share of respondents deeming the current conditions “a bad/terrible time to purchase” rose 11 points to 45 percent since the year-earlier survey, with those professing neutrality on the question tumbling 11 points to 42 percent.

“While the percentage of respondents considering now a good time to enter the market has remained historically high, many respondents are actually holding onto a wait-and-see attitude towards home ownership,” Citi said.

Younger Interest

Young respondents aged 21 to 29 showed the highest interest in home ownership, with 21 percent expressing an interest to buy a property — the same level of interest seen last year.

Among the young respondents, 80 percent voiced support for easing the longtime cooling measures for the housing market while 93 percent backed a relaunch of the government’s down-payment assistance policy.

Of the surveyed respondents who already own a home, 87 percent said they had no interest in selling their property while 12 percent expressed an interest in changing to a new property.

On the matter of home price trends, 57 percent of respondents said they thought prices would move downward in the next 12 months, 33 percent predicted flat prices and a mere 10 percent anticipated an increase.

The results of the survey, which was conducted by the Chinese University of Hong Kong and Cimigo Ltd, showed that respondents generally expect adjustments in property prices, Citi said.

“Prospective homebuyers are best advised to start as early as possible to review their asset allocation, assess their personal financial condition comprehensively, and identify an appropriate mortgage plan,” the bank said. “The sooner they start preparing, the faster they can expect to gradually realise their home ownership goals.”

Sputtering Sales

New project launches by Hong Kong developers achieved their lowest initial sales rate in five years during the first half of 2023, with only 55 percent of the 7,600 homes completed during the period having found buyers on their first day of sales, JLL reported in August.

With interest rates rising, the sell-through rate for new project launches was down from the 76 to 86 percent levels achieved from 2018 to 2021 and even underperformed the 67 percent notched during the lockdown year of 2022, the agency said.

“The slowdown in property sales in primary and secondary markets reflects most buyers have adopted a wait-and-see attitude and are reluctant to buy flats as they anticipate housing prices will drop,” said Norry Lee, senior director of projects, strategy and consultancy at JLL Hong Kong.