Hong Kong residential market sees support from mainland Chinese demand

Sean Ellison

Senior Economist, Asia-Pacific (RICS)

Our March Hong Kong Residential Market Survey indicates that demand from mainland Chinese investors is supporting momentum in the housing market. This is despite capital controls and an interest rate increase in March.

Hong Kong cityscape

Respondents indicated that demand from mainland Chinese respondents remained robust, helping to sustain housing market momentum. The outlook for credit conditions was neutral, following the latest interest rate increase in March.

Some anecdotal evidence has suggested that capital controls on the mainland has redirected some housing market investment to Hong Kong; this despite capital controls enacted by mainland authorities and the increased stamp duty introduced by the Hong Kong government in November. The survey also suggests that Hong Kong banks' ample liquidity continues to provide a buffer against interest rate increases by the US Federal Reserve; however, it is not clear whether the market has fully priced in the risks of a more rapid pace of interest rate normalisation.

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About the Hong Kong Residential Market Survey

The Hong Kong Residential Market Survey is a monthly survey generated by the RICS Economics Team. It captures market sentiment, the outlook for housing activities and prices, as well as respondents' views on a few key issues.

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