HONG KONG, CHINA – Media OutReach – 18 May 2020 – Citi Hong Kong conducted a survey on the impact of COVID-19 on residential property
ownership in Hong Kong in Q1 2020, gauging
respondents’ attitude towards residential property ownership before and during COVID-19.
According
to the survey:
Property price
expected to be 7.5% lower by year end, with a slightly less impact than in SARS
period
Amid COVID-19, in March 2020, 52% of the
respondents were very / rather uninterested in purchasing a property, compared
with 17% of the respondents with a keen / rather keen interest in purchasing a
property. The figures are similar to those recorded before COVID-19, showing
little change in the interest of home purchase among the respondents amid COVID-19.
However, 57% of the respondents surveyed during COVID-19 expected home
prices in Hong Kong to fall in the next 12 months. This represents a sharp increase of 15
percentage points compared with the percentage seen before COVID-19 in January, reflecting an overall increase in the percentage of
respondents holding a bearish view on the property market. Benchmarked against
a 10% decline in property prices witnessed during the SARS period in 2003, the
survey collected the views of respondents on the trend of the property market amid
COVID-19. The results show that the respondents expected a median decline in
property prices of 7.5% from the beginning to the end of the current year, and
with the largest expected drop of 10%, reflecting the perception of the
COVID-19 in 2020 as having a slightly less impact on the property market than
the SARS period in 2003. However, 24% of the respondents expected their
household finances to worsen in the coming year, doubled the number of respondents holding this view compared
with the same period of the previous year.
Despite the bearish view on the property market and the fact that more
than half of the respondents in the January and March 2020 surveys considered it
a bad / terrible time to purchase a home at this moment, the number of
respondents sharing this view during COVID-19 in March fell by 13 percentage
points compared with the figure recorded in January before COVID-19. This
compares with 10% of the respondents who considered now a good / excellent time
to purchase a home, up 100% from the figure seen before COVID-19 and representing
the highest percentage in 9 years of respondents holding this view.
The above results show that the respondents are looking favorably on the
timing of home purchase amid the COVID-19 global challenge, despite lingering concerns
about a fall in property prices and their finances in the future. This has
resulted in a continuation of the relatively low level of interest in property ownership.
If you do not own any property now, taking into | ||
Percentage of Respondents | ||
| January 2020 (Before COVID-19) | March 2020 (During COVID-19) |
A good/excellent time to purchase | 5% | 10% |
Neutral | 31% | 38% |
A bad/terrible time to purchase | 65% | 52% |
How do you think home prices will trend in the next 12 | ||
Percentage of Respondents | ||
| January 2020 (Before COVID-19) | March 2020 (During COVID-19) |
Upward | 20% | 16% |
Flat | 39% | 28% |
Downward | 41% | 57% |
How interested are you in purchasing a property now? | ||
Percentage of Respondents | ||
| January 2020 (Before COVID-19) | March 2020 (During COVID-19) |
Very/rather interested | 16% | 17% |
Neutral | 34% | 31% |
Very/rather uninterested | 50% | 52% |
Base: All Respondents
Property owners remaining
calm amid COVID-19
In March, during COVID-19, only 6.1% of property owners were willing to
sell their property at a 10% or higher discount, reflecting a sense of calmness
amid COVID-19 situation and they were not eager to sell their property despite
the widely-held belief that property prices would fall.
Josephine Lee, Head of Retail Banking, Citi
Hong Kong, said, “The results show the highest percentage in 9 years of
respondents considering it a good time to buy a property now, despite a
generally low level of interest in property ownership during COVID-19 and concerns about a fall
in property prices and finances in the future. We have seen the percentage of respondents
interested in home purchase remaining stable before and during COVID-19, with existing property owners staying calm amid
COVID-19 and showing no eagerness
to sell their property at low prices, after overcoming the challenges brought
by SARS. This reflects little impact of COVID-19 on the respondents’ plans to purchase or unload a property as they
continue to adopt a wait-and-see attitude towards the prospects of the property
market. We suggest that interested homebuyers comprehensively assess their financial position
and choose a mortgage plan that best meets their needs.”
Citibank commissioned The University of Hong Kong Social Sciences
Research Centre to conduct the survey, interviewing a random sample of over 500
Hong Kong respondents by phone in January and March 2020 respectively. Since
2010, Citibank has been conducting quarterly surveys on the Hong Kong housing
market to assess the current state of home ownership in the SAR, gauge public
intentions towards home ownership, and track public expectations of future
housing price trends.
Source: Citibank Q1 2020
Residential Property Ownership Survey
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