Hong Kong’s residential property segment is on the verge of a turnaround that could last between four and five years, with home prices likely to rise starting in the second half of the year, according to Morgan Stanley.
The US investment bank said the first half of the year would end with prices down 2 per cent from a year earlier, while prices in the second half would rise 2 per cent year on year. The call essentially moves the recovery forward in time and smooths it out compared with the previous forecast, which called for a 5 per cent first-half decline followed by a 5 per cent second-half rise.
This recovery was also likely to be sustained next year, said Praveen Choudhary, head of Hong Kong real estate research at Morgan Stanley and author of the report released on Friday.
“While we may be early, we see several reasons to be optimistic that we could be at the onset of an upcycle,” he said.
The city’s residential market had suffered through seven years of volatility, as prices hit a peak in July 2018, declined and then climbed back to another peak in September 2021, and since then have fallen nearly 30 per cent, according to official data.
“The decline in prices is behind us, and from here on we expect positive price increases,” Choudhary said.
