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Economic Recovery Key to Housing Demand in HK, Survey
Economic recovery will be the most important driver of housing demand in Hong Kong, according to a recent Hong Kong housing survey released Thursday.
The survey, jointly conducted by the Hong Kong-based J.P. Morgan and Midland Realty, both leading property companies in Asia, covers over 2,400 homebuyers in Hong Kong.
An overwhelming majority of the respondents cite economic recovery as the most important driver to housing demand, while less than 14 percent think that government policy is relevant, the survey found.
"The biggest overhang on the Hong Kong property market is cyclical, namely, the poor near-term outlook for the local economy, " Douglas Sung, J.P. Morgan's regional property analyst, commented.
"We envisage that, upon signs of economic improvement, the property market will react positively and sharply," Sung said. " Based on such a perspective, we think that the right time to upgrade the property sector may be in the fourth quarter this year, when we anticipate the macro environment will begin to stabilize," he added.
The survey also found that despite property price collapse since 1997, there is still a strong bias towards buying rather than renting, and about 50 percent of those surveyed think that current prices are reasonable.
Almost 30 percent of the respondents plan to spend as much as 30 percent to 40 percent of their income on housing, the survey showed.
More than 60 percent of the respondents do not plan to buy property in China's mainland within next three years, and potential buyers in the mainland are mostly looking for vacation homes and for properties priced below 500,000 HK dollars (about 64, 100 U.S. dollars).
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