HONG KONG, April 29, 2020 /PRNewswire/ — Cross-media property platform squarefoot.com.hk (“Squarefoot”), operated by the REA Group Limited (ASX:REA), today announced the results of its 2020 Q2 Hong Kong Real Estate Market Outlook Survey. The results show that local homebuyers’ purchasing appetite has rebounded to 2018 H2 levels during the COVID-19 pandemic, yet their budget for intended property purchase has slightly fallen.
The online survey was conducted in mid-April 2020 and involved 500 Hong Kong citizens. While 89% of respondents believe the pandemic will have at least some impact on local residential property values in the next three to six months, 42% believe the impact will be substantial. Almost half of the respondents (47%) felt that property values had reached their peak in the past 12 months. When looking at the specific reasons they believed prices would fall, respondents ranked ‘Epidemic situation’ (87%), ‘Global economic recession’ (81%) and ‘Hong Kong’s economy is worsened’ (79%) as the top three factors.
Despite this pessimistic sentiment towards local property market values, respondents’ intention to purchase residential properties over the next 12 months recorded a 7 percentage point increase to 26% since last October and climbed to 2018 levels (25% in 2018 H2). Almost half of the intended homebuyers among the respondents (48%) claimed that they are more likely to make a purchase during the pandemic.
However, 72% of intended homebuyers planned to purchase a property with a price lower than their original budget before the epidemic, with an average planned budget of HKD7.2 million, a reduction of HKD1.4 million (16%) from the previous survey conducted in October 2019. Among those who are renting, nearly half (47%) believe that rental values will decline in the next six months, with an average forecast decrease of 11.2%.
Kenneth Kent, General Manager, squarefoot.com.hk said, “The COVID-19 outbreak is having a growing impact on the local and global economy, as well as the real estate market. The survey results reveal that 86% of respondents think current property prices are still too high and 51% expect prices to drop in the coming six months. Even though homebuyers could benefit from falling property prices, their purchase decisions and budget could still be altered by various uncertainties such as employment prospects. Hence, we believe the market will likely remain under pressure in the short term.”
He continued, “The epidemic has also shifted investors’ behaviour when acquiring real estate market information, with a notable increase in overall usage of online property platforms. According to Squarefoot’s data, website traffic has risen steadily in the first three months of this year, and we have seen growth of 22% in site traffic and a 16% increase in property listing enquiries in March, compared to the previous month.”
The survey also found that 58% of intended buyers have reduced the frequency of in-person property viewings since the virus outbreak, while 60% of respondents said they are searching for property information on the internet more often.
Squarefoot’s research also highlighted a belief that further government action is needed to support buyers. Mandy Tam, Senior Director of Consumer Insights, Nielsen Hong Kong said, “The survey also sought to gauge respondents’ views on Hong Kong’s housing policies. We found that 73% of respondents think it is foremost important for the government to ‘expand the supply of housing with more discounts’, while over half of the respondents think it’s necessary to ‘release the income restriction for purchasing HOS (Home Ownership Scheme) flats’ (55%) and ‘re-instate the first-time buyer loan’ (54%).”
Squarefoot commissioned leading measurement and data analytics company Nielsen to conduct the 2020 Q2 Hong Kong Real Estate Market Outlook Survey. Feedback was collected from 500 respondents aged 18 to 65 through an online questionnaire during the fieldwork period of 8-17 April 2020. The survey aims to understand the perceptions of the Hong Kong public towards the local and overseas property markets and explore their purchasing behaviour. The margin of error of the survey is 4.4% at 95% confidence interval.
Kenneth Kent, General Manager, squarefoot.com.hk, today announced the results of the 2020 Q2 Hong Kong Real Estate Market Outlook Survey, which show 51% respondents expect prices to drop in the coming six months.
About squarefoot.com.hk
squarefoot.com.hk (Squarefoot) is a leading cross-media property platform in Hong Kong that was created to address local property buyers’ needs for diverse information on the Hong Kong and international markets. Squarefoot provides years of insight and experience in the Hong Kong property market, in addition to the strength of the REA Group, a global leader in property, to provide the best customer experiences.
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