Hong Kong property sales to rise 10 per cent in Year of the Rat as investors shrug off impact of Wuhan virus, social unrest

A rebound in the second quarter is likely to lift overall property sales in Hong Kong 10 per cent higher in the Year of the Rat despite uncertainties such as the deadly Wuhan virus outbreak and intermittent protests, according to Ricacorp Properties.

The property agency expects transactions of flats, commercial and industrial units to rise to 79,300 from around 72,100, a second straight year of declining volumes in the just-concluded Year of the Pig. The volumes were also the lowest in the past four years and third lowest historically. Ricacorp, however, did not provide a breakdown for home sales.

Growth this year will be driven primarily by the secondary market, Derek Chan Hoi-chui, head of research at Ricacorp, said in a note. He added the ongoing Wuhan coronavirus epidemic, which has claimed more than 100 lives on the mainland and the number of reported cases in Hong Kong rising, was unlikely to weigh on the city’s property market over the long term.

“The property market rose during the early part of the Year of the Pig, but [later] weakened to the social unrest and the US-China trade war,” Chan said, adding that both factors have largely disappeared, which could result in a spate of property transactions after these negative factors have run their course in the first quarter.

Earlier this month, the US and China signed a “phase one” deal, signalling a truce in an 18-month trade war between the world’s two largest economies. Meanwhile, the intensity of protests against the now-withdrawn extradition bill has largely reduced, with hardly any large scale demonstrations since the violence peaked in November.