Hong Kong buyers eye overseas properties | Singapore’s private residential market remains resilient; Stable demand continues to rise

Centaline Property Agency sharing updates on Hong Kong’s recent market condition and Singapore’s 2020 property trend on March 4. 

The U.S. Federal Reserve cut interest rates last night by half a percentage point to a target range of 1.00% to 1.25%. Mr. Louis Chan, Vice Chairman and Chief Executive Officer (Residential) - Asia Pacific of Centaline Property Agency says “The U.S. Federal Reserve had cut interest rates by 0.5% last night in a bid to shield the world’s largest economy from the impact of the coronavirus. In fact, with the cooling property measures in place, Hong Kong’s property market has remained stable for the past 9 years and the real estate bubble has long been eliminated.”
“The U.S. interest rate cut this time round means that the era of negative interest rates will fall and deposits will be reduced to physical investment. Of which, properties remain as the most stable option, even with Hong Kong experiencing the Social Movement, China-US trade war and the current pneumonia threat. According to Centaline City Leading Index, the current property prices in Hong Kong still sees an increase of 2%, year-on-year.”
“With the reduction of interest rates this time, the banks in Hong Kong might not follow and instead, the funds will go into property investment. The addition of a rate cut can provide an even more attractive opportunity for prospective homebuyers to enter the market.” Mr. Louis Chan also believes that the rate cut can ease the impact of the coronavirus outbreak on property prices in Hong Kong. It is expected that the decline in Hong Kong property prices will be reduced to 3% to 5% in 2020. Due to the large fluctuations in the global stock market caused by the epidemic, some cities with more stable financial systems such as Hong Kong and Singapore still remain as a safe-haven for property investors to park their money here. Therefore, it is believed that the property market transaction volume in both cities will start to go up in March.
Citing Hong Kong as an example, many developers are prepared to launch their new projects this month and it is expected that the accumulated buying power of nearly half a year will emerge in the market again. The new homes transaction volume in March is expected to exceed 1,000, nearly doubled as compared to February, while the transaction volume in the secondary market is expected to hit 3,000 to 3,500.

With the coronavirus epidemic in the recent months, buyers who had originally arranged to visit Singapore during the New Year were affected, Mr. David Hui, General Manager – Asia Pacific of Centaline (Singapore) Property Agency said. “Centaline will strengthen their marketing efforts using online tools as well as conducting live broadcasts on social media platforms for potential buyers to receive the latest updates on property market. Based on research data on Hong Kong residents who are investing in overseas properties, there was an increase in risk aversion.” 

According to Centaline Overseas Project Department, there were also more enquiries on Singapore properties last year, of which, 65% was for investment purposes and there was also a growing trend for those who wants to buy it for retirement purposes and overseas study. 

In line with data released by the Urban Redevelopment Authority (URA), it shows that the overall property price for 2019 rose by 2.7%. Mr. David Hui said that the rise of the property market trends in 2018 was mainly driven by collective sales in the first half of the year. With the new additional buyer’s stamp duty rolled out in 3rd quarter of 2018, the overall market sentiment has been dampened. “Developers then actively launched new projects in 2019 and we can see that the property market is picking up again.”

Last year, the transaction volume of completed sales was 9,912, an increase of 12.7% year-on-year, while the transaction volume of new homes rose from 8,768 units to 11,345 units, an increase of about 23%. The secondary market is relatively quiet, with only 9,238 transactions in 2019, which is approximately 30% less in 2018. This was mainly due to the sharp decline in collective sales in the second half of 2018. On the positive side, buyers are taking a wait-and-see approach and hope that the next collective sale cycle will drive up property prices. In short, the total number of transactions in 2019 was 19,150, which was 14% lesser in 2018, with 22,129 transactions.

The number of completed units was also down by about 6,692 units for the third consecutive year and the number of new private residential completed units 
was only 1/3 of that in 2016. However, with the on-going collective sale fever in the past two years, the number of completed units has gradually increased and will reach the highest peak in 2022, but is still 25% less than the 25,000 units which were completed in 2015. Therefore, the properties vacancy rate is still at a low end.
As of the end of the fourth quarter of 2019, the vacancy rate of completed private residential units decreased to 5.5%, from 6.1% in the previous quarter; while those in the prime districts have dropped to 6.9%. The decline in supply has also driven private property rents up by 3.7% last year, with 58,236 lease transactions in the year, an increase of 2.3% compared to 2018. It is expected to rise steadily this year. “We are optimistic on the overall property market outlook and the number of completed units’ transaction in 2020 should be ranging between 10,000 to 13,000. The overall property prices have increased by 5% and luxury property prices are also expected to increase by 10%.”

About Centaline (Singapore) Property Agency

Centaline (SG) Property Agency provides cross-border consultancy and agency services for overseas and local properties through Singapore office. As Centaline has built up an extensive network in Mainland China, Hong Kong, Macau, Taiwan and Singapore, Centaline Singapore acts as a bridge between vendors, purchasers, landlords, and tenants across these places.


About Centaline Property Agency

Centaline Property Group is one of Hong Kong's largest property agencies. With over 60,000 employees and 2,600 offices across China, Hong Kong, and Macau, the company is also one of the largest real estate agencies in the region. 

The organization positions itself as Asia's one-stop property services company, offering services, including real estate valuation, property market research, asset management, and mortgage brokerage. In recent years, Centaline Property Group has expanded to Taipei and Singapore markets, and is gradually expanding in other Chinese-speaking continents in the world.