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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
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Any government rollback of property cooling measures is likely to boost home sales in Hong Kong, but even completely scrapping the measures would not be enough to revive a market that is grappling with high interest rates and a sluggish economy, according to analysts.
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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.
The government gave its strongest hint yet that it could soon ease Hong Kong’s property cooling measures, with Financial Secretary Paul Chan Mo-po saying on Wednesday that the conditions that prompted authorities to impose such moves more than a decade ago no longer prevailed.
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“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.”
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