The results of the March 2019 RICS-Spacious Hong Kong Residential Market Survey show a sustained rebound in sentiment in Hong Kong's housing market.
The Confidence Index saw a sharp increase for a second consecutive month rising to +53 in March. On Hong Kong Island the index rose to +66, the highest reading since April 2015.
Data shows the significance of the shifts in pricing in the past month. Respondents reporting aggregate price declines of 0–5% fell sharply from February, while the opposite was true for those reporting price increases of 0–8%. In net balance terms, the share of contributors reporting an increase in prices outweighed those reporting a decrease for the first time since September 2018.
Data indicates that the pent-up demand that had been waiting on the sidelines has re-entered the market as it has stabilised. However, the outlook remains somewhat cautious over the longer term, an indication that the market does not expect a repeat of the rapid increases in prices and rents experienced in 2017 and early 2018.
Sean Ellison, Senior Economist, Asia Pacific, RICS
This was underpinned by a robust increase in demand. New buyer enquiries increased at the fastest pace in two years. Vendors appear to have recognised the return of buyers to the market, data shows that instructions to sell rose in March and the indicator of agreed sales rising at the fastest pace (in net balance terms) in two years. Against this backdrop, short-term expectations for prices and sales increased for the second consecutive month and are now firmly rooted in positive territory.
Data shows that respondents see prices increasing 2.3% over the next year. Although this is more optimistic than what has been expected in previous months, there is still a degree of caution relative to previous upcycles. A weighted average of a third of respondents still expect nochange or a decline in prices over the next year. A similar dynamic was reported for the lettings market.
James Fisher, COO and Head of Market Analytics, Spacious
The Hong Kong Residential Market Survey is a leading sentiment indicator of conditions in the Hong Kong residential sales and lettings markets.
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Senior Economist, Asia Pacific
Sean is responsible for the RICS Economics team’s research into the Asia-Pacific property sector, identifying market risks to the sector and analysing economic events and their effects on real estate.