HK developers getting cautious of residential market

Even consultants are getting scared.

According to Barclays, although the recent fine-tuning of the Double Stamp Duty (DSD) in Hong Kong has helped to boost sentiment, most Hong Kong property developers and consultants remain cautious in their residential outlook.

The overall direction for home prices remains driven by the “visible hand” of supply.

Here’s more from Barclays:

As more land is made available for tender, land and home prices are expected to continue to trend down.

Participants of Barclays Asia Financial & Property Conference were generally of the view that the fine-tuning of the DSD should offer some help to potential homebuyers, but differed in their assessment of the impact.

On the negative side, Midland believes the upfront nature of the DSD remains a key hurdle for potential homebuyers.

On the positive side, Centaline believes the relaxation may help the secondary market more than the primary market as the DSD had already been mitigated by the developers’ various rebates.

Overall, although both developers and consultants noted the recent rebound in transaction volumes, both were keen to highlight that volumes remain well below historical normal levels.