Hong Kong households paint divergent picture about home prices: CIMB

Based on surveys by property agents.

A divergent view about home prices in Hong Kong is held by various households, with a rising number viewing these rates as expensive, yet a growing number expects prices to rise.

According to a research report on Hong Kong property by CIMB, these views are the results of recent surveys by a number of property agents.

The report noted that only the number of households expecting home prices to remain steady is in decline.

Here's more from CIMB:

Incorporating such expectations into a model of the housing market is difficult but such information can tell us much about the state of the market.

It is worth remembering that with no short selling, home prices simply reflect the valuation of the most optimistic buyer, which means that prices can sometimes provide misleading signals as to the stability of the market.

One advantage however, is that survey results are often reflected in the households’ actions. Given that households, as opposed to firms, own the majority of property, those households that choose to invest in property are typically making a portfolio shift from holding bank deposits to owning property.

In this regard, the recent shift in household investment portfolios from demand to time deposits (as some households reduce their liquidity preference) is consistent with the majority view that home prices are expensive.

It implies that past enthusiasm for housing and cheap credit is diminishing.