Henderson Land is said to hold a neutral view on the outlook for the Hong Kong housing market following the recent “policy easing”.
According to the company the overall outlook remains driven by the very visible hand of supply. They divided the outlook for the Hong Kong property market into three areas, or spheres.
1) The Outlook is most challenging for the suburban new towns where continuous land supply will exert downward pressure on prices.
2) In new towns with railway access, it expects home prices to stabilise after an initial 6-9% decline.
3) For urban in-town locations, the outlook is better and prices should rebound after an initial 5-6% drop.
Henderson Land believes the government remains very committed to its 10-year housing supply target of 470,000 units. It expects many more land tenders to come in 4Q14 and 1Q15 and the continued increase in supply will put downward pressure in the suburban new town areas.
The recent policy relaxation may help with sentiment but overall it does not see a significant recovery in volume in the next six months.