Overall property market sentiment improves as the number of people expecting higher property prices next year doubles

HONG KONG, CHINA - Media OutReach - 4 August 2020 - Citi Hong Kong conducted a survey in June this year on the impact of COVID-19
on residential property ownership in Q2 2020, gauging residents' attitudes
towards residential property ownership as COVID-19 unfolded. According to the survey:

• More than 10% of the respondents considered it
  a good/excellent time to buy a home at this moment, representing a slight
  increase from the previous quarter, and remains the highest percentage in
  nine years.
• The public were split on the trend of property
  prices. In this quarter, the proportion of respondents who considered that
  property prices will rise in the next 12 months has doubled as compared
  with the previous quarter, and the number of respondents who expected
  property prices to fall has decreased significantly.
• The overall interest in purchasing residential
  property over the past two quarters has rebounded, with more than
  one-fifth of this quarter's respondents interested in buying a home.
• Compared to the figures in the first quarter
  and the second quarter, the impact of COVID-19 on the attitude towards the
  property market in the second quarter has eased. Respondents anticipated property
  prices at the end of the year would be similar to that at the beginning of
  the year taking into account COVID-19's impact, which was expected to only
  knock 5% off property prices at most.

Property market
sentiment has improved, with rebounded interest in buying properties

The survey in Q2 2020 indicated a relative calm sentiment in the property
market with positive changes observed in important indicators, including the
judgment on the time of property purchasing, the views on the trends of property
prices and the interest towards property buying. In this quarter, although a
considerable proportion of respondents considered now a bad/terrible time to
purchase a home, more than 10% of the respondents considered now a
good/excellent time to do so, representing a slight increase from the previous
quarter and the percentage remained at its highest level in nine years. As for
the trend of property market, respondents who anticipated property prices to
rise, remain flat and fall next year were evenly split, with each option accounting
for 33% to 34% of all respondents. Compared with the previous quarter, the number
of respondents expecting property prices to rise in this quarter has doubled,
while the number of respondents expecting property prices to fall has decreased
significantly. Meanwhile, the overall interest in purchasing a property has
rebounded over the past two quarters, with more than one-fifth of this
quarter's respondents suggesting they were interested in buying a home.

Base: All
Respondents

Base: All
Respondents

Base: All
Respondents

COVID-19's impact
on attitude towards property market is diminishing

According to the survey, the respondents' feedback over the impact of COVID-19
on the property market this quarter was less than that in the previous quarter.
Respondents in this quarter anticipated property prices at the end of the year
would be similar to that at the beginning of the year taking into account COVID-19's
impact, which was expected to only knock 5% off the property prices at most.

"The results show that the public is beginning
to regain their confidence in purchasing residential property" said Josephine Lee, Head of Retail Bank, Citi Hong
Kong. "As the
overall property market sentiment improved in the second quarter of this year
and the number of respondents expecting property prices to rise has doubled,
the property market's development is gradually returning to normal. 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 June 2020. 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 Q2 2020
Residential Property Ownership Survey

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