The local property market will go through a “mild correction” of 5 percent in the third quarter, with a possibility of a growth in the fourth quarter with the release of new flats, real estate agencies said on Wednesday.
The local offices of Hong Kong-based real estate agencies Jones Lang LaSalle (JLL) and Centaline separately held press conferences on Wednesday about the city’s real-estate market trends.
According to JLL, the fall in housing prices is expected to narrow to about 5 percent for the rest of the year.
“Most of the corrections have been reflected already so for the remaining half of the year, the correction would only be about 5 percent,” JLL Head of Residential Jeff Wong Chi Wai said on Wednesday, adding that the “mild correction” applied to both the capital and rental values of residential properties.
JLL’s own data shows that because of the slowdown in the gaming market, newly completed residences were launched at discounted prices in the first half of the year, resulting in the capital value for high-end and mass-to-medium residential sectors to fall by 17.1 percent year-on-year and 11.6 percent year-on-year respectively in the first six months this year.
But since new gaming projects are opening soon, it would give the market a boost.
“For mass and medium-sized [properties] we believe the rental will be stabilised at the current levels, especially with new [gaming] projects launching soon, there will be a growth in imported labour, which will lend support to the rental market,” Wong said.
According to JLL, the gaming projects in Cotai, when they open in two to three years’ time, will add 2,800 gaming tables, 17,000 hotel rooms and 2.4 million square feet of retail space to the city, creating 60,000 jobs.
Meanwhile, Centaline’s local office director Jacky Shek Po Tak said he expected prices to pick up in the second half of the year so that the market would see a 20 percent growth for the whole year.
“Because of the falling gaming revenues, those who needed to withdraw from the market to get cash have already done so in the first two quarters, so there won’t be big discounts anymore in the third quarter,” Shek said, pointing out that as prices become more stable, developers would begin putting their new flats on the market, which would happen in the fourth quarter.
In terms of the retail property market, JLL’s data shows that the overall retail capital values fell by about 6.6 percent and rentals dropped by 5.8 percent in the first half of the year from prices at the end of 2014.
Both agents said that the trend for the retail property market would be more or less the same in the second half of this year.