CEO of Lugar Estates, Leung Wai-keung, stated that property prices are expected to drop by 8% to 10% over the year. Although the comprehensive withdrawal of cooling measures at the end of February briefly boosted the property market, other unfavorable factors have not improved, and the market lacks sustained momentum for further ascent. Once purchasing power is absorbed, the market begins to soften.
Initially, Leung Wai-keung anticipated a 5% to 8% increase in property prices for the whole year if the cooling measures were completely withdrawn. However, after observing for several months, considering aspects such as supply, economic conditions, and interest rate trends, not only are there no positive factors, but the situation seems to be worsening. It is predicted that the property market will experience simultaneous drops in both volume and price in the second half of the year, leading to short-term pressure.
Furthermore, he pointed out that new property sales have been sluggish over the past two years, with the inventory of new units reaching nearly 21,000 at the beginning of the year. Although developers have been actively promoting their projects following the withdrawal of cooling measures, the overall inventory has increased to almost 23,000 units. Economic recovery is not evident, and high interest rates are lingering, which suppresses investment and consumption intentions. On the rental side, due to the continuous influx of professionals and more international students enrolling in local universities, it is expected that rents will rise by another 3% in the second half of the year, amounting to at least a 6% increase for the whole year.