As a result of the epidemic and interest rate hike, Centaline expects 11,000 first-hand private residential transactions to be registered in 2022, a 37% drop from last year.
In terms of value, the number of first-hand transactions is expected to reach only $120 billion, down 49% from last year, as the majority of new sales are in the New Territories.
Both the volume and value of transactions are at a nine-year low since the 2013 first-hand record.
Second-hand prices also fell, with only 32,000 second-hand private residential transactions forecast for 2022, a 38% drop from 2021, and a record low in transaction volume since records began in 1995.
In terms of property prices, Hong Kong's secondary property prices have been sluggish since hitting a record high in August 2021, and with Mainland regulation and the severe epidemic in Hong Kong in the first quarter, the CCL continues to fall, but not as much as the US interest rate hike.
The US Federal Reserve raised interest rates by 0.25% in March this year and has raised rates six times in a row.
Although Hong Kong only raised its prime rate twice during the period, totalling 0.375%, which had little impact on the real mortgage burden, property prices started to fall in the third quarter after the US rate hike due to adverse factors such as the recurring epidemic in the Mainland and the war between Russia and Ukraine.
As of 9 December, the CCL city leading index has fallen by nearly 15% this year, and the eight indices have fallen by more than 10% this year, with property prices in the four regions falling most sharply in Kowloon, where the CCL Mass has fallen by 17%.
Among the many indices, the index of large flats fell the least, recording 10%. Chan Wing-kit pointed out that luxury flats are more resilient because the mortgage ratio is low, even though the impact of interest rate hike is relatively small, and luxury flat owners can accept a small price reduction.
Chan Wing-kit believes that the worst moment of the property market will be over, the Mainland has relaxed the epidemic prevention measures twice within a month, the China-Hong Kong border crossing is expected, the market is also rumored that Hong Kong may try to open border crossing with the Mainland before the New Year.
But the economic recovery will take time, property prices are expected to bottom out in the first quarter of next year, and property prices are expected to rebound by 15% at the bottom of the year.
Chan Wing-kit said, if the first quarter fails to pass the customs clearance, no spicy measures are introduced, the second-hand property prices will continue to decline in the first quarter, the Centaline City Leading Index has the chance to test 150 points.
But I believe that the Hong Kong government will not sit idly by and do nothing about the downturn in the economy, and will definitely clear customs with the Mainland within the year.
In terms of transaction volume, first-hand developers will need to catch up with their results and will still be restrained in their pricing, and may even offer various incentives to attract customers and stimulate sales.
Second-hand transactions are expected to reach 50,000 in 2023 as a result of increased exchange activities driven by the first-hand and white home ownership schemes.
