Mainland Buyers To Turn Property Prices Around: Agent

A property agent said on Wednesday that there's been a significant "bounce" in sentiment and activity in the hard-hit sector since quarantine-free travel with the mainland resumed a week and a half ago, raising hopes that a recent fall in home prices will soon turn around.

Home prices in Hong Kong fell to a five-year low late last year as a weak economy and rising interest rates hit buyer sentiment, but Nicholas Brooke, chairman of Professional Property Services, told RTHK's Hong Kong Today programme that he expected prices to flatten in the short to medium term and edge up in the second half of the year.

"We've seen a downturn of about 15 percent over the last 14, 15 months and people were forecasting a further downward adjustment of five to ten percent," he told RTHK's Ben Tse.

"But I think what's happened, this interest in the reopening of the border, has meant that that potential downturn is likely to stall, if you like. We're going to see a flattening of the market, that downward adjustment is probably now unlikely to occur and then we'll begin to edge upwards. We might see three to five percent [growth] in the second half of the year."

Brooke said mainland buyers were targeting new projects in Hong Kong as investment properties or second homes. He said new projects in Fanling, Tin Shui Wai and Tuen Mun had seen strong interest, according to developers.

He said that, unlike many local buyers, people from the mainland were often paying in cash, allowing them to negotiate discounts of up to eight percent. This would also mean that they weren't constrained by rising interest rates, Brooke added.

Brooke also expected increased activity in the secondary market, with sellers setting more realistic prices.

However he noted that up to 40,000 new homes were expected to come onto the market this year, which could potentially weigh on prices.