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News Release

Hong Kong house prices could fall at least 15% in 2019 on back of trade war

Joseph Tsang, Managing Director, JLL Hong Kong


If current trade tensions between the United States and China worsen, and the stock market continues to slide, prices in Hong Kong's costly housing market will fall at least 15 percent in 2019, according to JLL forecasts.

 

However, the decline could well be more pronounced – up to 25 percent – if the Hong Kong government doesn't re-assess and adjust its property cooling measures, says Joseph Tsang, Managing Director for JLL Hong Kong.

 

Prices of mass residential properties have tripled since the Global Financial Crisis of 2008 and are now 63 percent higher than their 1997 market peak. Yet, growing uncertainty around the city's economic outlook has seen prices dip 1.4 percent over the last two months.

 

The Hong Kong government has already implemented measures such as lowering loan-to-valuation (LTV) ratios and imposing higher tax levies in an effort to cool the housing market. These initiatives have caused property transaction volumes to drop to historically low levels, but they may not be enough to pull back prices and allow for a soft landing for the city's housing market.

 

"Failure to adjust existing measures will not only exacerbate the price correction but could also have dire consequences for the local economy. We urge the Hong Kong government to remove the special stamp duty, review the application of the double stamp duty and lift LTV ratios," says Tsang.

 

Currently, buyers in Hong Kong who purchase second flats are required to pay a 15 percent stamp duty and another 15 percent in special stamp duty will apply to residential units re-sold within three years.

 

Download Report Vietnam Property Market Brief 3Q/2018 HERE

Download Report “Vietnam Property Market Brief 3Q/2018” HERE

 

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About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with nearly 300 corporate offices, operations in over 80 countries and a global workforce of 83,500 as of March 31, 2018. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.