The exorbitant cost of Hong Kong’s housing market has always headlined news. Prices have doubled from what they were in 2009, and the city continues its rank amongst the world’s most expensive. However forecasts by researchers predict a screeching halt in price hike, with potential to even fall from 5 to 30% depending on opinion.
Before 2011, the increase in property price was induced by mismatch between supply and demand. This gap has begun to close and according to the government figures 86000 private homes are under construction as of September 2015. According to estimates, 15000 to 18000 of these saleable units will soon be available for sale, this represents a 40% increase in supply over recent years and this increased supply will naturally limit the ability of developers to charge premiums for new builds.
Researchers also cite various reasons for the incoming drop in home prices in Hong Kong. The stagnating Chinese economy and global trade through Hong Kong, the fall in visitor arrivals from the Mainland – leading to slowing of retail sales in Hong Kong- and the looming interest rate hike by the US Federal Reserve, are plausible causes offered.