This results in a perennial Hong Kong housing crisis. Land scarcity in the city which lies on the eastern Pearl River Delta in South China makes properties intrinsically expensive. Notable growth of home prices in the Hong Kong real estate market happened in 2009 (28.5%), 2010 (21%), 2012 (25.7%), in 2014 (13.6%) and in 2017 (14.7%), according to the publication, which could be indicating a Hong Kong housing bubble. Try demo House prices in Hong Kong over the yearsĪccording to Global Property Guide’s report from April 2022, in the past 13 years the Hong Kong property market enjoyed spectacular growth, with home prices rising by 275%. Typically, demand for housing decreases during economic downturns, especially recessions, which cause job losses, reduced savings, and a lack of open positions. Failure to pay a mortgage puts a homeowner at risk of defaulting and foreclosure, which could increase the number of available homes. When a central bank raises its benchmark interest rate, it may become harder to find new buyers due to higher cost of mortgage payments. There are several factors that can increase housing demand including low mortgage rates, better welfare and easy access to bank loans. The housing bubble could burst and cause a collapse in prices if homebuilders keep building new homes even after sales and demand have begun to dwindle. At some point, house prices may exceed their actual value due to a rapid increase in demand, resulting in a housing bubble. House prices, like all assets, rise and fall over time. We take a closer look at factors driving the prices analysts’ forecasts on the housing price crash in Hong Kong. But will it prevent a Hong Kong housing price crash? Since September, Hong Kong has gradually lifted its strict Covid-19-related travel restrictions, which was expected to spur mobility and housing demand. However, this may change in the future as a variety of headwinds, ranging from Covid-19 restrictions to rising interest rates, have resulted in more vacant residential properties and falling prices. The housing market in Hong Kong remains the most expensive in the world.
Is Hong Kong property market in a bubble? – Photo: Shutterstock Rasto SK
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